Bond

A coalition of 35 Republican senators led by Kay Bailey Hutchison of Texas, Kit Bond of Missouri and Lisa Murkowski of Alaska has called on the White House to tap new domestic oil and natural gas resources and to expeditiously complete the administration’s five-year plan for developing resources on the Outer Continental Shelf (OCS).

Noting it has made some “minor tweaks” to its portfolio of public-sector bond financing packages, the Southern California Public Power Authority (SCPPA) executive director said Tuesday that none of the authority’s renewable and other energy projects currently being pursued have been affected by the subprime mortgage market meltdown that continues to adversely affect some of its counterparties. Standard & Poor’s Ratings Services (S&P) reiterated double-A level credit ratings for SCPPA.

The financing arm of the municipal electric utility in Roseville, CA, received a negative outlook from Standard & Poor’s Ratings Services (S&P) on a $209.35 million tax-exempt bond to finance a 20-year, 46 Bcf natural gas pre-pay deal with Merrill Lynch & Co. because of recent financial disclosures by Merrill. S&P also gave an “AA-” rating to Roseville Natural Gas Financing Authority, the fuel financing unit of the muni in Roseville, a suburb east of Sacramento. S&P said the rating reflects a recent outlook revision for Merrill Lynch & Co. Inc., which provides guarantees to the financing authority’s gas supplier and interest rate swap counterparty. The outlook downgrade followed Merrill’s announcement that it expects to record a material loss in the third quarter caused by a more significant exposure to leveraged loan commitments, subprime mortgages, etc. S&P’s previous outlook assumed less exposure for Merrill. The Roseville gas financing arm is a state-chartered joint powers authority and a nonprofit public financing entity in California. The public financing arm used the proceeds from the $209.35 million to fund prepayment for a long-term gas supply deal from Merrill Lynch Commodities Inc. The gas is set for Roseville’s electric power generation system, priced at a first-of-the-month index from the Pacific Gas and Electric Co. citygate delivery point, minus a specific discount, according to S&P.

The financing arm of the municipal electric utility in Roseville, CA, received a negative outlook from Standard & Poor’s Ratings Services (S&P) on a $209.35 million tax-exempt bond to finance a 20-year, 46 Bcf natural gas pre-pay deal with Merrill Lynch & Co. because of recent financial disclosures by Merrill. S&P also gave an “AA-” rating to Roseville Natural Gas Financing Authority, the fuel financing unit of the muni in Roseville, a suburb east of Sacramento. S&P said the rating reflects a recent outlook revision for Merrill Lynch & Co. Inc., which provides guarantees to the financing authority’s gas supplier and interest rate swap counterparty. The outlook downgrade followed Merrill’s announcement that it expects to record a material loss in the third quarter caused by a more significant exposure to leveraged loan commitments, subprime mortgages, etc. S&P’s previous outlook assumed less exposure for Merrill. The Roseville gas financing arm is a state-chartered joint powers authority and a nonprofit public financing entity in California. The public financing arm used the proceeds from the $209.35 million to fund prepayment for a long-term gas supply deal from Merrill Lynch Commodities Inc. The gas is set for Roseville’s electric power generation system, priced at a first-of-the-month index from the Pacific Gas and Electric Co. citygate delivery point, minus a specific discount, according to S&P.

Dynegy Inc. on Tuesday launched a major junk bond refinancing project, as well as a long-awaited stock restructuring to pay off a credit line with ChevronTexaco Inc., its largest shareholder. If the transactions are completed as envisioned, Dynegy’s debt maturities would be “significantly” reduced over the next few years, including a portion of its recently restructured $1.66 billion credit facility and the secured financing of its Midwest generation assets.

Xcel Energy subsidiary NRG Energy is fast approaching the basement of junk bond ratings levels. Standard & Poor’s (S&P) lowered its credit ratings to CCC from B-plus last Thursday due to NRG’s urgent need to sell off a massive number of power generation assets in order to meet a $1.3 billion collateral payment deadline of Sept. 13 or convince lenders it will be able to make the payments soon. S&P also lowered its credit rating on NRG Northeast Generating LLC’s bonds and NRG South Central Generating LLC’s bonds to CCC.