S&P: Orange Cogen bonds on positive watch

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

The CreditWatch placement follows a similar positive watch placed on the project's bank, Deutsche Bank Trust Co. Americas in December, the agency said.

The rating on the project is weak-linked to that on Deutsche Bank Trust because the replacement provision in the project agreement does not fully comply with the financial counterparty criteria, S&P explained.

Orange Cogen Funding is a subsidiary of Orange Cogeneration LP, which 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 deal it has with Duke Energy Florida that expires in 2026, S&P said.

The project also sells steam to off-takers Peace River and Bartow Ethanol above the requirement to maintain qualifying facility status, the agency added.

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