Enertech Envionmental breaches covenants for four revenue bond series

By Susanna Moon

Chicago, Jan. 22 - Enertech Environmental California, LLC has violated covenants under its loan agreement with the California Statewide Communities Development Authority, according to a notice by Deutsche Bank National Trust Co. as trustee.

The loan agreement is backed by the authority's $161,785,000 principal amount outstanding of series 2007A senior tax-exempt revenue bonds, series 2007B senior taxable revenue bonds, series 2007C first subordinate tax-exempt revenue bonds and series 2007D second subordinate taxable revenue bonds.

The trustee said it was notified on Dec. 23 that Enertech received the prior day a cease and desist order issued on Dec. 21 for violating Santa Ana Watershed Project Authority Pretreatment Ordinance No. 5 and that the company's permit had been suspended.

Deutsche Bank said Enertech could default on its loan agreement with the authority if it fails to remedy the covenant violations within 60 days of notice from the trustee.

The company has informed the trustee that it is diligently working with its engineers, the Santa Ana Watershed Project Authority and the permit authorities to resolve the issues.

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