S&P lowers Salton Sea bonds to BB-

Standard & Poor's said it lowered its rating to BB- from BB on Salton Sea Funding Corp.'s (SSFC) $285 million senior bonds due 2018 ($77.8 million outstanding as of June 30). The recovery rating remains unchanged at 1.

At the same time, the agency affirmed the B- rating on holding company CE Generation LLC's $400 million secured bonds due 2018 ($135.8 million outstanding as of June 30). The recovery rating remains unchanged at 2.

The outlooks are negative.

"The rating action on SSFC's senior bonds reflects our view of SSFC's weaker performance and our uncertainty regarding future project cash flow as a result of reduced revenue, higher-than-anticipated operating expenses, and capital expenditures," S&P credit analyst Antonio Bettinelli said in a news release. "Performance through June 30, 2014 missed our expectations and necessitated an increase in sponsor contributions."

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