S&P: Salton Sea to negative

Standard & Poor's said it revised the outlook to negative from stable on Salton Sea Funding Corp.'s senior secured notes due 2018.

The negative outlook reflects a view of reduced cash flows stemming from lower revenue due to low natural gas pricing, higher costs and outages in late 2012, which will cause Salton Sea to draw on project liquidity or seek parental support to make the next semi-annual debt service payment under the agency's base case, S&P said.

The agency said it believes the outages experienced in 2012 are not likely to reoccur, but the project remains in a weaker financial condition.

Debt-service coverage will continue to be low, but will improve in 2013, S&P said.

The company's $285 million senior secured notes due 2018 have a BBB- rating.

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