SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report
Pursuant to Section 13 or 15 (d) of the
Securities Exchange Act of 1934
Date of Report January 17, 2001
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(Date of earliest event reported)
Commission File No. 33-95538
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SALTON SEA FUNDING CORPORATION
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(Exact name of registrant as specified in its charter)
47-0790493
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(IRS Employer Identification No.)
(State or other
jurisdiction
(Exact name of Registrants of incorporation (I.R.S. Employer
as specified in their charters) or organization) Identification No.)
- ------------------------------- ------------------ -------------------
Salton Sea Brine Processing L.P. California 33-0601721
Salton Sea Power Generation L.P. California 33-0567411
Fish Lake Power LLC Delaware 33-0453364
Vulcan Power Company Nevada 95-3992087
CalEnergy Operating Corporation Delaware 33-0268085
Salton Sea Royalty LLC Delaware 47-0790492
VPC Geothermal LLC Delaware 91-1244270
San Felipe Energy Company California 33-0315787
Conejo Energy Company California 33-0268500
Niguel Energy Company California 33-0268502
Vulcan/BN Geothermal Power Company Nevada 33-3992087
Leathers, L.P. California 33-0305342
Del Ranch, L.P. California 33-0278290
Elmore, L.P. California 33-0278294
Salton Sea Power LLC Delaware 47-0810713
CalEnergy Minerals LLC Delaware 47-0810718
CE Turbo LLC Delaware 47-0812159
CE Salton Sea Inc. Delaware 47-0810711
Salton Sea Minerals Corp. Delaware 47-0811261
302 S. 36th Street, Suite 400-A, Omaha, NE 68131
(Address of principal executive offices and
Zip Code of Salton Sea Funding Corporation)
Salton Sea Funding Corporation's Telephone Number,
including area code: (402) 341-4500
N/A
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(Former name or former address, if changed since last report)
Item 5. Other Events.
On January 17, 2001 Moody's Investors Service, Inc. ("Moody's")
announced that it had lowered its rating on the senior secured bonds of Salton
Sea Funding Corporation ("Salton Sea Funding") from Baa3 to Caa2. The basis for
this decision was Moody's downgrade of its ratings for Southern California
Edison Company ("Edison") announced earlier this week. According to Moody's, the
rating of the Salton Sea Funding bonds remains on review for possible further
downgrade reflecting the possibility that the ratings of Edison could decline
further.
The Salton Sea bonds are secured by the cash flows and assets of ten
operating geothermal power plants in the Imperial Valley, California (the
"Projects") with an approximate aggregate capacity of 326 MW. Eight of the
Projects with an approximate aggregate net rated capacity of 267 MW sell their
capacity and energy to Edison under long-term power sales contracts.
These eight Projects have not yet received payment from Edison for
capacity and energy delivered during November 2000. These contracts provide for
billing and payment on a schedule where payment would normally be received in
early January 2001. Edison has provided no assurance as to when it will make
these payments. A failure by Edison to make these payments as well as subsequent
monthly payments, for a substantial period of time after the payments are due,
could have a material adverse effect on the financial condition of Salton Sea
Funding and the Projects and on their ability to make payments on the Salton Sea
Funding bonds.
Certain information included in this report contains forward-looking
statements made pursuant to the Private Securities Litigation Reform Act of 1995
("Reform Act"). Such statements are based on current expectations and involve a
number of known and unknown risks and uncertainties that could cause the actual
results and performance of the Registrants to differ materially from any
expected future results or performance, expressed or implied, by the
forward-looking statements including expectations regarding the future results
of operations of Registrants. In connection with the safe harbor provisions of
the Reform Act, the Registrants have identified important factors that could
cause actual results to differ materially from such expectations, including
development and construction uncertainty, operating uncertainty, acquisition
uncertainty, uncertainties relating to geothermal resources, uncertainties
relating to economic and political conditions and uncertainties regarding the
impact of regulations, changes in government policy, industry deregulation and
competition. Reference is made to all of the Registrants' SEC Filings,
incorporated herein by reference, for a description of such factors. The
Registrants assume no responsibility to update forward-looking information
contained herein.
Item 7. Financial Statements and Exhibits
Exhibit 1 - Moody's Press Release dated January 17, 2001
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934 the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
SALTON SEA FUNDING CORPORATION
Date: January 19, 2001 By: /s/ Paul J. Leighton
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Paul J. Leighton
Secretary
Fundamental Credit Research
Rating Action
Published 17 Jan 2001
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Salton Sea Funding Corporation
Parent: MIDAMERICAN ENERGY HOLDING CO.
New York New York
Susan D. Abbott A.J. Sabatelle
Managing Director Corporate Finance Vice President - Senior Analyst
Corporate Finance
Moody's Investors Service Moody's Investors Service
Clients: 1.212.553.1653 Clients: 1.212.553.1653
MOODY'S LOWERS DEBT RATINGS FOR PROJECTS EXPOSED TO COUNTERPARTY RISK OF
CALIFORNIA UTILITIES
Moody's Investors Service has lowered its debt ratings for the following project
financed issuers:
o Caithness Coso Funding Corp. notes due 2001 to Caa2 from Ba1 and notes due
2009 to Caa2 from Ba2;
o Edison Mission Energy Funding Corp. to Caa2 from Baa3;
o FPL Energy Caithness Funding Corp. to Caa2 from Baa3;
o Juniper Generation LLC to Caa2 from Baa3; and
o Salton Sea Funding Corp. to Caa2 from Baa3.
These rating actions have been precipitated by Moody's downgrade of Southern
California Edison Company (SCE) and Pacific Gas and Electric Company (PGE)
announced earlier this week. As previously mentioned, it is Moody's practice for
the credit rating of a project whose cash flow is largely derived from a single
source to be capped by the unsecured rating of the respective source of funds.
All projects noted above have substantial cash flow exposure to either SCE or
PGE and therefore have been lowered to reflect the further deterioration of the
credit quality of those cash flows.
The ratings for each of these projects remain on review for downgrade to reflect
the possibility that the ratings of SCE and PGE could decline further. In light
of the liquidity issues at both of the utilities, Moody's believes that it is
increasingly probable that additional payments to Qualifying Facilities in the
state could be delayed or deferred.
(C) Copyright 2001 by Moody's Investors Service, 99 Church Street, New York, NY
10007. All rights reserved.
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from $1,000 to $1,500,000. MADE IN U.S.A