Fitch Affirms East Coast Power Following Goldman Sachs Acquisition.Business Editors CHICAGO--(BUSINESS WIRE)--Oct. 16, 2003 Fitch Ratings Fitch Ratings An international rating agency for financial institutions, insurance companies, and corporate, sovereign, and municipal debt. Fitch Ratings has headquarters in New York and London and is wholly owned by FIMALAC of Paris. affirms the 'BBB-' rating of East Coast Power's (ECP (Enhanced Capabilities Port) See IEEE 1284. 1. ECP - Engineering Change Proposal. 2. ECP - Enhanced Capabilities Port. 3. ECP - Extended Capabilities Port. 4. ECP - Extended Concurrent Prolog. ) senior secured bonds following Goldman Sachs' acquisition of ECP. On April 17, Fitch commented that the acquisition would have no material effect on the credit quality of ECP; this view remains unchanged. Goldman Sachs The Goldman Sachs Group, Inc., or simply Goldman Sachs (NYSE: GS) is one of the world's largest global investment banks. Goldman Sachs was founded in 1869, and is headquartered in the Lower Manhattan area of New York City at 85 Broad Street. currently holds a 99% interest in ECP, and Enron maintains a 1% non-voting, non-economic interest. Fitch considers ECP a bankruptcy remote entity. Therefore, the assigned rating reflects ECP's credit quality on a stand-alone basis, independent of the credit quality of its owners. The acquisition, announced in April, was delayed pending the Federal Energy Regulatory Commission's (FERC FERC Federal Energy Regulatory Commission FERC FEMA Emergency Response Capability ) investigation of Enron's ownership of certain qualifying facility (QF) assets. On Oct. 1, the FERC trial staff filed an uncontested settlement finding that QF requirements had not been violated with respect to QF assets currently held by ECP. Goldman Sachs expects the FERC to approve the uncontested settlement. In addition, Goldman Sachs will retain $70 million of ECP's acquisition price until the FERC investigation is conclusively resolved. ECP bondholders rely solely on the cash flows of the six-unit Linden, NJ cogeneration facility, which sells energy principally to Consolidated Edison (ConEd). Goldman Sachs has advised the change of ownership does not affect ECP's primary contracts, including the long term power purchase agreement (PPA PPA 1. Palpation, Percussion & Ausculation 2. Pittsburgh pneumonia agent 3. Postpartum amenorrhea 4. Price per accession 5. Pure pulmonary atresia ) with ConEd. ECP's credit quality is dependent in part on ECP's ability to effectively procure natural gas. Payments under the ConEd PPA are indexed to ConEd's weighted average cost of gas (WACOG WACOG Weighted Average Cost of Gas ). Therefore, ECP's cash flow is negatively affected if it cannot purchase gas at a cost that is competitive with ConEd's WACOG. Fitch believes that Goldman Sachs, via its commodities trading subsidiary J. Aron & Company, has the appropriate expertise and market access to approximate ConEd's WACOG. Fitch rates Goldman Sachs' unsecured debt Unsecured debt Debt that does not identify specific assets that the debtholder is entitled to in case of default. 'AA-'. |
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion