Caithness Coso expects to have cash to retire $110 million notes due Dec. 15, 2001

By Peter Heap

New York, Nov. 7 - Caithness Coso Funding Corp. said it expects to be able to retire its $110 million of 6.80% senior secured notes due Dec. 15, 2001 despite the lingering effects of the California power crisis.

The company said in a filing with the Securities and Exchange Commission Tuesday that current year cash flow from operations should be sufficient to fully pay off the debt when it matures.

The notes were issued in May 1999 as part of a $413 million offering. The company also sold $303 million of 9.05% senior secured notes due 2009.

The notes are rated Caa2 by Moody's Investors Service and BB by Standard & Poor's.

Caithness Coso was created to issue the debt, proceeds of which were used to finance three geothermal projects in the Mojave Desert that sell electricity to Southern California Edison.

From November 2000 to March 26, 2001, SoCalEd did not make payments because of the California electricity crisis but resumed on an order from the California Public Utilities Commission.

Caithness Coso said SoCalEd's Oct. 2, 2001 settlement with the CPUC allowing it to recover its past shortfall from retail electric rates should eliminate some of the uncertainty. However this agreement is still subject to court hearings. Caithness Coso added that it is still in discussions with SoCalEd.

SoCalEd currently owes a total of $45.825 million to Caithness Coso from the period it did not make payments, Caithness Coso said in the SEC filing. It noted the SoCalEd continues to pay interest on the outstanding amount at 7%.

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