8-K 1 0001.txt 8-K ON RATINGS 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 ------------------------------- (Date of earliest event reported) Commission File No. 33-95538 ----------------------- SALTON SEA FUNDING CORPORATION ------------------------------ (Exact name of registrant as specified in its charter) 47-0790493 ---------- (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 -------------------------------------------------------------------------------- (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 ------------------------ Paul J. Leighton Secretary Fundamental Credit Research Rating Action Published 17 Jan 2001 ================================================================================ 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. ALL INFORMATION CONTAINED HEREIN IS COPYRIGHTED IN THE NAME OF MOODY'S INVESTORS SERVICE, INC. ("MOODY'S"), AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT MOODY'S PRIOR WRITTEN CONSENT. All information contained herein is obtained by MOODY'S from sources believed by it to be accurate and reliable. Because of the possibility of human or mechanical error as well as other factors, however, such information is provided "as is" without warranty of any kind and MOODY'S, in particular, makes no representation or warranty, express or implied, as to the accuracy, timeliness, completeness, merchantability or fitness for any particular purpose of any such information. 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