S&P cuts Indiantown bonds to junk

Standard & Poor's said it lowered its rating on Indiantown Cogeneration Funding Corp.'s $505 million first mortgage bonds due Dec. 15, 2020 (currently $400.7 million outstanding) to BB+ from BBB-. At the same time, the rating on the $125 million tax-exempt bonds due 2025 issued by Martin County Industrial Development Authority for Indiantown was cut to BB+ from BBB-.

The ratings were removed from CreditWatch, where they were placed with negative implications on March 19. The outlook is stable.

S&P said the downgrade reflects the exposure to the market price of coal after 2007 and the mismatch between energy revenues and fuel expenses that were not adequately mitigated for the long term.

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