Moody's may cut Borger Energy bonds

Moody's Investors Service said it placed the Ba1 rating of Borger Energy Associates LP's 7.26% first mortgage bonds due 2022 under review for possible downgrade.

The rating review is prompted by an expectation of a further reduction in the project's steam revenues and fuel margin, a lengthening of the projected period during which the project will receive reduced capacity revenues, and increased debt service relating to a loan incurred to purchase and install a new generator in 2006, Moody's said.

The above factors lead to Moody's expectation that Borger's debt service coverage ratios will remain below the level that is consistent with the Ba1 rating through at least 2006 and possibly into 2007.

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