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SITHE/INDEPENDENCE FUNDING CORP. SECURED NOTES RATED 'BBB' BY FITCH -- FITCH FINANCIAL WIRE --

 NEW YORK, Nov. 20 ~PRNewswire~ -- Sithe~Independence Funding Corp.'s planned issue of $713 million in secured notes is rated 'BBB' by Fitch.
 Sithe, a wholly owned subsidiary of Sithe~Independence Power Partners, L.P., plans to issue the notes in three tranches maturing through 2013. Proceeds will finance the 1000 megawatt gas-fired Independence cogeneration project in Oswego, N.Y. Most of the electric output will be sold to Consolidated Edison Co. under a 40 year power purchase agreement with the remainder being sold to Niagara Mohawk Power under a 20 year energy only contract. Niagara Mohawk will also provide a firm transmission for 20 years.
 The investment grade rating primarily reflects the strength of the fixed-price, turnkey construction contract, the quality of the contractors, a consortium of General Electric Corp. and Ebasco, and the plant's conventional gas-fired technology. The 'AA' credit rating of the primary power purchaser, Con Edison, strong community support, and the favorable cost and environmentally clean source of the power are also important rating considerations. Once commercial operation begins, scheduled for January 1995, the project should generate strong cash flow to support debt service on the secured notes.
 Sithe and Con Edison have agreed to a revised power purchase contract that should eliminate political opposition that initially surrounded this project. The renegotiated contract provides Con Edison with firm capacity and energy based on Con Edison's prevailing long run avoided cost (LRAC) for 40 years.
 The primary risks include controlling costs during the construction phase that are not part of the turnkey contract and completing pipeline construction on a timely basis. Final receipt of certain permits expected after the start of construction is also a concern. All state environmental permits have been approved. The risk of not attaining pre-operational performance levels or not maintaining availability after completion should be mitigated by the conventional technology as well as the use of dual power blocks. After commercial operation, maintaining qualified facility status is critical to the success of the project.
 Fuel-related economic exposure is alleviated by the price capped transportation contracts and by gas commodity pricing that is designed to track power sales arrangements. Natural gas will be provided and managed by Enron Corp., the premier gas supply aggregator in the U.S. Gas transportation is being supplied by seven domestic and Canadian pipelines and is under contract for the same 20-year term as the supply agreement. Although there are five pieces of pipeline to be constructed, the largest being the 155 mile Empire State Pipeline, there do not appear to be any significant regulatory hurdles and pipeline construction completion should comfortably meet the project's schedule.
 -0- 11~20~92
 ~CONTACT: Robert Hornick, 212-908-0564, or Alan Spen, 212-908-0594, both of Fitch~


CO: Sithe~Independence Funding Corp. ST: New York IN: OIL SU: RTG

AH-KW -- NY056 -- 3591 11~20~92 17:43 EST
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Publication:PR Newswire
Date:Nov 20, 1992
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