S&P cuts Indiantown Cogeneration view to negative

Standard & Poor's said it affirmed its BB+ rating on Indiantown Cogeneration Funding Corp.'s $505 million first-mortgage bonds due 2020 and $125 million tax-exempt bonds due 2025 and revised the outlook to negative from stable.

S&P noted that the outlook revision reflects our increasing concerns over the project's continuing mismatch between its energy payments received from Florida Power & Light Co. and its actual coal costs, which leads to low debt service coverage ratios.

The rating on Indiantown Cogen further reflects the out-of-market purchase-power agreement with Florida Power, noting that capacity payments at $276 per kilowatt-year are high in relation to current market prices.

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