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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported): August 31, 1998
Commission File Number 33-83618
SELKIRK COGEN PARTNERS, L.P.
(Exact name of Registrant as specified in its charter)
Delaware 51-0324332
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
SELKIRK COGEN FUNDING CORPORATION
(Exact name of Registrant as specified in its charter)
Delaware 51-0354675
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
One Bowdoin Square, Boston, Massachusetts 02114
(Address of principal executive offices, including zip code)
(617) 788-3000
(Registrant's telephone number, including area code)
ITEM 5. OTHER EVENTS
On August 31, 1998 Selkirk Cogen Partners, L.P. ("Selkirk" or the "Partnership")
and Niagara Mohawk Power Corporation ("Niagara Mohawk") consummated the
transactions relating to the amendment and restatement of the existing power
purchase agreement between the Partnership and Niagara Mohawk, pursuant to the
Master Restructuring Agreement dated as of July 9, 1997, as amended, among
Niagara Mohawk, the Partnership and certain other independent power producers
(the "MRA"). As contemplated by the MRA, on that date (i) the Partnership
notified Niagara Mohawk of the Partnership's determination that the requirements
of the Partnership's Trust Indenture, dated as of May 1, 1994 (the "Indenture"),
with respect to the restructuring of certain project contracts relating to the
operation of Unit 1 of the Selkirk facility had been satisfied; (ii) the Amended
and Restated Power Purchase Agreement, dated as of July 1, 1998, between the
Partnership and Niagara Mohawk became effective; and (iii) Niagara Mohawk made
certain payments into the Partnership's Project Revenue Fund maintained at
Bankers Trust Company, as Depositary Agent under the May 1, 1994 Deposit and
Disbursement Agreement. In addition, the Partnership has delivered notices to
Paramount Resources Limited ("Paramount") and TransCanada Pipelines Limited
("TransCanada") that the Second Amended and Restated Gas Purchase Contract,
dated as of May 6, 1998, between the Partnership and Paramount, and the Amending
Agreement to Gas Transportation Contract, dated as of July 20, 1998, between the
Partnership and TransCanada have become effective. The above-described
transactions are referred to herein as the "Unit 1 Restructuring."
Also on August 31, 1998 the Partnership forwarded to Bankers Trust Company, as
Trustee, the statement of its authorized representative (the "Selkirk Officer's
Certificate") certifying that, among other things, the implementation of the
Unit 1 Restructuring could not reasonably be expected to result in a Material
Adverse Change (as defined in the Indenture) and, after giving effect to such
transactions, the minimum annual Projected Debt Service Coverage Ratio (as
defined in the Indenture) will exceed 1.5:1 and the average annual Projected
Debt Service Coverage Ratio for the remaining term of the bonds issued under the
Indenture (the "Bonds") will exceed 1.75:1. The Selkirk Officer's Certificate
was accompanied by written certifications required to be made under the
Indenture by R.W. Beck, Inc. ("R.W. Beck"), as the Independent Engineer, and
C.C. Pace Consulting, L.L.C., as the Gas Consultant (in each case as defined in
the Indenture). The Selkirk Officer's Certificate and the related certifications
of the Independent Engineer dated as of August 31, 1998 (the "Independent
Engineer's Certificate"), and the certifications of the Gas Consultant dated
August 28, 1998 are filed as Exhibits to this Report on Form 8-K.
The projections from which Projected Debt Service Coverage Ratios are derived
(the "Projected Operating Results") are set forth at Attachment B to the
Independent Engineer's Certificate, have been prepared by the Partnership and
reviewed and accepted by R.W. Beck on the basis of present knowledge and
assumptions which the Partnership and R.W. Beck believe to be reasonable. For
purposes of preparing the Projected Operating Results, certain assumptions were
made, of necessity, with respect to general business and economic conditions,
the revenues the Partnership will receive for electric energy and steam and the
resale of natural gas, the cost to the Partnership of obtaining natural gas
supplies and several other material contingencies and other matters that are not
within the control of the Partnership nor R.W. Beck and the outcome of which
cannot be predicted. These assumptions and the other assumptions used in such
analysis and identified in the notes to the Projected Operating Results are
inherently subject to significant
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uncertainties, and actual results will be different, perhaps materially, from
those projected. Accordingly, the Projected Operating Results are not
necessarily indicative of current values or future performance and none of the
Partnership, Selkirk Cogen Funding Corporation, R.W. Beck or any other Person
assumes any responsibility for their accuracy. While these assumptions are based
on currently known information and are dependent upon future events, the
Partnership and R.W. Beck have each certified to the Trustee, as required under
the Indenture, that the assumptions upon which the subject Projected Debt
Service Coverage Ratios are based are reasonable and materially consistent with
the Partnership's project agreements and historical operating results. None of
the Partnership, Selkirk Cogen Funding Corporation, R.W. Beck or any other
Person have any obligation, nor do they intend, to provide the holders of the
Bonds with updated reports or revised projections comparing the Projected
Operating Results and actual operating results later achieved by the
Partnership.
On August 31, 1998, the Partnership received written notice from Standard &
Poor's Corporation ("S&P") that, after giving effect to the Unit 1
Restructuring, S&P affirmed its "BBB-" rating of the Selkirk Cogen Funding
Corporation's Bonds and removed the rating from CreditWatch. On August 27, 1998,
the Partnership received written notice from Moody's Investors Service, Inc.
("Moody's") that, after giving effect to the Unit 1 Restructuring, Moody's
affirmed its "Baa3" rating of the Selkirk Cogen Funding Corporation's Bonds,
changed the outlook of the Bonds Due 2007 from "negative" to "stable" and has
not changed its previous "negative outlook" with respect to the Bonds Due 2012.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
EXHIBITS.
(c) Exhibits Required by Item 601 of Regulation S-K.
(i) Amended and Restated Power Purchase Agreement , dated as of July
1, 1998, between Selkirk Cogen Partners, L.P. and Niagara Mohawk
Power Corporation
(ii) Mutual General Release and Agreement, dated as of July 1, 1998,
between Selkirk Cogen Partners, L.P. and Niagara Mohawk Power
Corporation
(iii) Second Amended and Restated Gas Purchase Contract, dated as of
May 6, 1998, between Selkirk Cogen Partners, L.P. and Paramount
Resources Limited
(iv) Amending Agreement, dated as of July 20, 1998, between
TransCanada Pipelines, Limited and Selkirk Cogen Partners, L.P.
(v) Officer's Certificate of Selkirk Cogen Partners, L.P., dated
August 31, 1998, delivered to Bankers Trust Company, as Trustee
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(vi) Independent Engineer's Certificate of R.W. Beck, Inc., dated as
of August 31, 1998, delivered to Bankers Trust Company, as
Trustee
(vii) Gas Consultant's Certificate of C.C. Pace Consulting, L.L.C.,
dated August 28, 1998, delivered to Bankers Trust Company, as
Trustee
(viii) Press Release of Selkirk Cogen Partners, L.P., dated August 31,
1998
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
SELKIRK COGEN PARTNERS, L.P.
Date: September 16, 1998 /s/JMC SELKIRK, INC.
------------------------
General Partner
Date: September 16, 1998 /s/JOHN R. COOPER
-------------------------
Name: John R. Cooper
Title: Senior Vice President and
Chief Financial Officer
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
SELKIRK COGEN FUNDING
CORPORATION
Date: September 16, 1998 /s/ JOHN R. COOPER
-----------------------
Name: John R. Cooper
Title: Senior Vice President and
Chief Financial Officer
EXHIBIT INDEX
Exhibit No. Description
10.1 Amended and Restated Power Purchase Agreement, dated as of
July 1, 1998, between Selkirk Cogen Partners, L.P. and
Niagara Mohawk Power Corporation
10.2 Mutual General Release and Agreement, dated as of July 1,
1998, between Selkirk Cogen Partners, L.P. and Niagara
Mohawk Power Corporation
10.3 Second Amended and Restated Gas Purchase Contract, dated as
of May 6, 1998, between Selkirk Cogen Partners, L.P. and
Paramount Resources Limited
10.4 Amending Agreement, dated as of July 20, 1998, between
TransCanada Pipelines, Limited and Selkirk Cogen Partners,
L.P.
99.1 Officer's Certificate of Selkirk Cogen Partners, L.P., dated
August 31, 1998, delivered to Bankers Trust Company, as
Trustee
99.2 Independent Engineer's Certificate of R.W. Beck, Inc., dated
as of August 31, 1998, delivered to Bankers Trust Company,
as Trustee
99.3 Gas Consultant's Certificate of C.C. Pace Consulting,
L.L.C., dated August 28, 1998, delivered to Bankers Trust
Company, as Trustee
99.4 Press Release of Selkirk Cogen Partners, L.P., dated August
31, 1998
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