Central Plains Energy solicits consents for series 2007A, 2007B bonds

By Susanna Moon

Chicago, March 19 - Central Plains Energy Project said it is soliciting consents from holders of its series 2007A and series 2007B gas project revenue bonds, project No. 1.

The proposed amendments would permit Central Plains to provide credit support for MBIA, Inc., as an investment agreement provider for the working capital account of the project fund ($10,095,000), the current reserve subaccount of the debt service reserve account ($21.63 million) and the early termination reserve subaccount of the debt service reserve subaccount ($6,235,000), by amending the gas supply contracts between the issuer and the project participants, amending and restating the receivables purchase agreement and amending the Goldman Sachs guaranty, and by making corresponding amendments to the indenture, according to a press release.

The issuer also seeks to amend and restate the gas purchase agreement with J. Aron & Co., as gas supplier, to eliminate a seller default if Goldman Sachs Group, Inc. fails to maintain a credit rating of BBB- or higher by Standard & Poor's or Baa3 or higher by Moody's, or otherwise post credit support, the release said.

The amendments also would create a custodial arrangement for the commodity swaps in order to mitigate the issuer's credit exposure to the Royal Bank of Scotland plc, as the commodity swap counterparty, and make corresponding amendments to the commodity swaps.

Central Plains needs consents representing at least a majority in principal amount of the outstanding bonds to amend the notes.

In addition, the proposed amendments are conditioned on the series 2007 bonds receiving ratings of at least A3 from Moody's, A- from S&P and A- from Fitch Ratings. As of March 18, the series 2007 bonds are rated B2 by Moody's, B by S&P and A by Fitch Ratings.

The consent solicitation will end at 5 p.m. ET on April 16. Holders must be of record as of 5 p.m. ET on March 15.

RBC Capital Markets, LLC (855 845-9469) is the solicitation agent. D.F. King & Co. (800 431-9645 or collect 212 269-5550) is the information agent and tabulation agent.

Central Plains Energy Project is a Nebraska governmental agency that acquires, purchases, sells, transports and manages natural gas.

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