S&P lowers Orange Cogen view to negative

S&P said it affirmed the BBB+ rating on Orange Cogen Funding Corp.'s $110 million senior secured bonds due 2022.

The outlook has been revised to negative from stable.

The negative outlook is driven by the project's bank, Deutsche Bank Trust Co. Americas, whose outlook was downgraded to negative in July, S&P said.

The rating on the project is weak-linked to the rating on Deutsche Bank Trust because the replacement provision in the project agreement doesn't fully comply with the financial counterparty criteria, the agency said.

Orange Cogen Funding is a subsidiary of Orange Cogeneration LP, the owner of a 104 megawatt gas-fired cogeneration power plant in Florida that began commercial operation in 1992, S&P said.

Orange Cogeneration is wholly owned by Northern Star Generation LLC through its subsidiary NSG Holdings LLC, the agency said.

With the expiration of the power purchase agreement with Tampa Electric Co. in 2015, Orange Cogen sells 100% of its electricity under a power purchase agreement with Duke Energy Florida that expires in 2025, S&P said.

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