S&P affirms TermoEmcali Funding rating

Credit rating agency Standard and Poor's ( S&P) has affirmed its CC rating on the US$165 million senior secured notes issued by TermoEmcali Funding Corp, S&P said in a statement Wednesday, adding that the outlook remains negative. TermoEmcali Funding Corp is related to Colombian power generator TermoEmcali, which owns a 234MW combined cycle natural gas-fired power generation facility that sells capacity and energy to Cali multi-utility Emcali under the terms of a power purchase agreement (PPA). Emcali and TermoEmcali are in the process of renegotiating the PPA. The rating is contingent upon TermoEmcali's full and timely coverage of its next coupon payment of US$5.1mn, which is due December 2003. "The negative outlook reflects the expectation for continued deterioration of TermoEmcali's ability to repay its debt, considering that the project's off-taker, Emcali, defaulted on its payment and TermoEmcali's debt reserve fund is being depleted," S&P analyst David Gonzalez said.