S&P affirms Colowyo bonds

Standard & Poor's said it affirmed its BB rating on Colowyo Coal Funding Corp.'s $192.8 million bonds due 2011 and 2016.

The outlook is negative.

The rating reflects the transaction's structural weakness caused by a broadly defined force majeure clause, the agency said.

During the first and second halves of 2007, the project recorded debt service coverage ratios of 0.97x and 0.96x, respectively, requiring about $780,000 of draws on its debt service reserve letter of credit, the agency noted.

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