Moody's may upgrade Borger Energy

Moody's Investors Service said it placed the B1 senior secured rating of Borger Energy Associates, LP on review for upgrade.

The outlook is stable.

The review for upgrade considers the project's Steam Sales Agreement (SSA) renewal with WRB Refining, LP on favorable terms that should ultimately contribute to higher financial metrics, Moody's said.

WRB Refining, LP is a joint partnership between Phillips 66 and Cenovus Energy Inc., the agency said.

Key improvements include increased margin on steam revenue including an increase in the steam factor and a new monthly payment based on plant availability, Moody's said.

In addition, the maturity date of the agreement was extended for five years to match the June 2024 maturity of Borger's power purchase agreement with Southwestern Public Service Co., the agency said.

The agency said it views this as credit positive because the extended agreement enhances cash flow visibility beyond the rated debt's maturity in December 2022, Moody's said.

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