Standard & Poor's Affirms Quezon Power Ltd. Ratings; Off Watch

Apr 27, 2001, 01:00 ET from Standard & Poor's

    NEW YORK, April 27 /PRNewswire/ -- Standard & Poor's today affirmed its
 double-'B'-plus foreign currency rating on Quezon Power (Philippines), Ltd.
 Co.'s US$215 million senior-secured bonds due 2017 and its triple-'B'-minus
 local currency issuer credit rating.  At the same time, the ratings were
 removed from CreditWatch following the successful conversion of Quezon's U.S.
 EXIM Bank construction loan into long-term financing.  The outlook is
 negative.
     Quezon is a Philippine limited partnership owned indirectly by affiliates
 of InterGen, Ogden Energy Group Inc., Global Power Investments LP, and PMR
 Ltd. Co. Coal supplies come from the PT Adaro and PT Kaltim Prima mines in
 Kalimantan, Indonesia, and should be sufficient to meet Quezon's requirements.
     Quezon successfully met the conditions precedent for converting its U.S.
 EXIM construction loan by April 27, 2001.  The project would have faced
 refinancing risk if this conversion had not occurred by April 30, 2001.  The
 US$424.6 million long-term loan is funded by Private Export Funding Corp. and
 covered by a comprehensive guarantee from the U.S. EXIM Bank.
     Quezon's project is a 440 MW (net) base-load, pulverized, coal-fired power
 plant and 31-kilometer transmission line located on the east coast of Luzon
 Island, southeast of Manila.  The project has been completed, with Quezon
 declaring May 30, 2000, as the commercial operating date under the power
 purchase agreement (PPA) with Manila Electric Co. (Meralco) (foreign currency
 double-'B'-plus/Negative/--).  The final acceptance date under the
 engineering, procurement, construction, and management contract with Overseas
 Bechtel Inc. and Bechtel Overseas Corp. is likely to be retroactively declared
 to July 2000.  Quezon's debt-service reserve will not be forthcoming until the
 U.S. EXIM Bank term loan is funded.
     Debt will be serviced from revenues pursuant to a 25-year unconditional
 take-or-pay PPA with Meralco.  Capacity payments alone should be sufficient to
 service the debt.  The project has a minimum after-tax project debt-service
 coverage ratio of 1.5 times (x) and an average coverage ratio of 2.2x.
 
     OUTLOOK: NEGATIVE
     The negative outlook on the foreign currency debt reflects the outlook on
 the sovereign rating of the Philippines (foreign currency:
 double-'B'-plus/Negative/'B', local currency: triple-'B'-plus/Negative/'A-2').
 The negative outlook on the local currency rating reflects uncertainties
 relating to industry restructuring and regulatory pressure that may affect
 both Meralco and Quezon, Standard & Poor's said. -- CreditWire
 
 

SOURCE Standard & Poor's
    NEW YORK, April 27 /PRNewswire/ -- Standard & Poor's today affirmed its
 double-'B'-plus foreign currency rating on Quezon Power (Philippines), Ltd.
 Co.'s US$215 million senior-secured bonds due 2017 and its triple-'B'-minus
 local currency issuer credit rating.  At the same time, the ratings were
 removed from CreditWatch following the successful conversion of Quezon's U.S.
 EXIM Bank construction loan into long-term financing.  The outlook is
 negative.
     Quezon is a Philippine limited partnership owned indirectly by affiliates
 of InterGen, Ogden Energy Group Inc., Global Power Investments LP, and PMR
 Ltd. Co. Coal supplies come from the PT Adaro and PT Kaltim Prima mines in
 Kalimantan, Indonesia, and should be sufficient to meet Quezon's requirements.
     Quezon successfully met the conditions precedent for converting its U.S.
 EXIM construction loan by April 27, 2001.  The project would have faced
 refinancing risk if this conversion had not occurred by April 30, 2001.  The
 US$424.6 million long-term loan is funded by Private Export Funding Corp. and
 covered by a comprehensive guarantee from the U.S. EXIM Bank.
     Quezon's project is a 440 MW (net) base-load, pulverized, coal-fired power
 plant and 31-kilometer transmission line located on the east coast of Luzon
 Island, southeast of Manila.  The project has been completed, with Quezon
 declaring May 30, 2000, as the commercial operating date under the power
 purchase agreement (PPA) with Manila Electric Co. (Meralco) (foreign currency
 double-'B'-plus/Negative/--).  The final acceptance date under the
 engineering, procurement, construction, and management contract with Overseas
 Bechtel Inc. and Bechtel Overseas Corp. is likely to be retroactively declared
 to July 2000.  Quezon's debt-service reserve will not be forthcoming until the
 U.S. EXIM Bank term loan is funded.
     Debt will be serviced from revenues pursuant to a 25-year unconditional
 take-or-pay PPA with Meralco.  Capacity payments alone should be sufficient to
 service the debt.  The project has a minimum after-tax project debt-service
 coverage ratio of 1.5 times (x) and an average coverage ratio of 2.2x.
 
     OUTLOOK: NEGATIVE
     The negative outlook on the foreign currency debt reflects the outlook on
 the sovereign rating of the Philippines (foreign currency:
 double-'B'-plus/Negative/'B', local currency: triple-'B'-plus/Negative/'A-2').
 The negative outlook on the local currency rating reflects uncertainties
 relating to industry restructuring and regulatory pressure that may affect
 both Meralco and Quezon, Standard & Poor's said. -- CreditWire
 
 SOURCE  Standard & Poor's