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S&P: LSP Batesville unaffected by Virginia Electric downgrade
Standard & Poor's said the downgrade of Virginia Electric & Power Co. to BBB+ from A- does not affect the credit rating on the $326 million senior secured bonds co-issued by LSP Energy LP and LSP Batesville Funding Corp. (together, LSP Batesville, B-/negative/--).
S&P said the rating on the LSP Batesville bonds reflects the credit risk of the weakest link in the project's contractual structure, Aquila Inc. (B-/negative/--).
Aquila is the off-taker of one-third of the project's total output pursuant to a power purchase agreement.
Under current market conditions, S&P said merchant revenues from its third unit in the Southeastern Electric Reliability Council region would not be sufficient to cover debt service fully.
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