Fitch Affirms Kincaid Generation LLC's Senior Secured Bonds at 'BBB-'.CHICAGO -- 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. has affirmed Kincaid Generation LLC's (Kincaid) $265 million ($199 million outstanding) senior secured bonds at 'BBB-'. The Rating Outlook is Stable. The rating reflects Kincaid's credit quality on a stand-alone basis, independent of the credit quality of its owner. Considering its current operating risk profile, Kincaid's financial performance measurably exceeds that of most power projects in the rating category. However, once current contracts expire in 2013, Kincaid will be fully exposed to merchant prices. Accordingly, the rating reflects Kincaid's anticipated performance as a merchant plant during the last seven years of the debt. Kincaid consists of two nominal 554-MW coal-fired generating units located in Kincaid, IL. Kincaid is a limited-liability company that is owned and operated by subsidiaries of Dominion. Kincaid has entered into a 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 the Exelon Corp. (Exelon, IDR IDR In currencies, this is the abbreviation for the Indonesian Rupiah. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. rated 'BBB+' by Fitch) that expires in 2013. Exelon also provides coal and emission allowances for both SO2 and NOx at no cost to Kincaid as part of a separate coal supply agreement (CSA (1) (Canadian Standards Association, Toronto, Ontario, www.csa.ca) A standards-defining organization founded in 1919. It is involved in many industries, including electronics, communications and information technology. ). Together, the PPAs and CSA effectively result in a tolling agreement in which Exelon has complete dispatch rights and Kincaid receives fixed and variable payments that are consistent with its cost structure. Consequently, during the term of the PPAs, the primary factors that could affect cash flow are Kincaid's ability to maintain both a high availability factor and a low heat rate. The annual debt service coverage ratio The debt service coverage ratio (DSCR), or debt service ratio, is the ratio of net operating income to debt payments on a piece of investment real estate. It is a popular benchmark used in the measurement of an income-producing property’s ability to produce for 2007 was at 2.4 times (x), rebounding from 1.76x and 1.78x during extended planned outages that occurred in 2005 and 2006, respectively. Fitch expects this to be typical of the performance during the PPA term. Fitch's rating definitions and the terms of use Terms of Use are rules set up by the owner of an intellectual property or service to govern how they may be legally used. In many cases, terms of service are used as a contractual agreement between a company and users of a service they provide. of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures Policies and Procedures are a set of documents that describe an organization's policies for operation and the procedures necessary to fulfill the policies. They are often initiated because of some external requirement, such as environmental compliance or other governmental are also available from the 'Code of Conduct' section of this site. |
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