Borger Energy Associates L.P./Borger Funding Corp. $117 Million Notes Downgraded To #B-# From #B+#; Outlook Stable

Stocks and Financial Services Press Releases Wednesday August 31, 2016 17:21
SAN FRANCISCO--31 Aug--S&P Global Ratings

SAN FRANCISCO (S&P Global Ratings) Aug. 30, 2016-- Standard & Poor's Global Ratings today lowered its rating on U.S. electricity and steam generator Borger Energy Associates L.P./Borger Funding Corp.'s (Borger) $117 million senior secured notes due Dec. 31, 2022 to 'B-' from 'B+'. The recovery rating is '4L', indicating the expectation for an average (30% to 50%) recovery in a default. The outlook is stable.

The rating action reflects our expectation of substantial weakening in the project's debt service coverage and liquidity balances. We base our view on significantly higher spending requirements to refurbish the turbine rotors, an increase in the combined-cycle heat rate that better aligns our forecast with historical actuals, and gas pricing that continues to be weak.

Borger Energy Associates L.P./Borger Funding Corp. (Borger) is a 230 megawatt natural gas-fired cogeneration facility near Borger, Texas. Commercial operations began on June 12, 1999. The project sells its energy output and electrical capacity to Southwestern Public Service Co., a subsidiary of Xcel Energy Inc., under the terms of a 25-year power purchase agreement. The project also sells its steam output to Phillips 66 under a 20-year steam sales and operating agreement (SSOA). DCP Midstream L.P. (formerly Duke Energy Field Services LLC) supplies gas under a 20-year agreement. Consolidated Asset Management Services is responsible for operations and maintenance. FREIF NAP I

Holdings III LLC owns the project.

The stable outlook reflects our view that the current assumptions for gas prices, major maintenance funding and operational performance support the 'B-' rating as long as the project's liquidity does not significantly decline under

our base case scenario. Ratings List

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