Moody's cuts Borger Energy bonds to Ba3

Moody's Investors Service said it downgraded Borger Energy Associates LP's 7.26% first mortgage bonds due 2022 to Ba3 from Ba1, concluding the review for downgrade that was initiated on July 22.

The outlook is stable.

The downgrade is prompted by deterioration in operating and financial performance and the expectation that the company's debt-service coverage measures will be weak through 2006, the agency said.

Moody's said the lower coverages reflect a significant and prolonged reduction in steam revenues, unplanned outages and, to a lesser extent, debt to be incurred in conjunction with the purchase and installation of a new generator.

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