Morethan $1 billion in bonds that were issued by a subsidiary of to pay forthe Solar Star project in California are at risk of being downgraded after anequipment failure took down a portion of the plant.
FitchRatings on July 21 issued a negative rating watch for Solar Star Funding LLC's$1.32 billion in senior secured notes due in 2035. A "catastrophic"transformer failure in May knocked out the 310-MW Solar Star 1 unit. Since then, the 586-MWproject has been operating at about 74% capacity, Fitch said.
Theoutages are expected to result in about $27 million in lost revenue, Fitchsaid. A replacement transformer is expected to be in service by July 27, andFitch said it would reinstate a stable outlook if repairs are completed by theend of July and the plant's monthly availability is consistently at or above96%. The project historically has performed above 99%, Fitch said.
S&PGlobal Market Intelligence data shows the plant's strongest levels ofproduction last year were May through August.
bought the project from SunPowerCorp., a subsidiary of the French energy company , in 2013. At the time, theBBB- rated debt represented the largest bond issuance for a solar project.
, in astatement, said replacement equipment "will be installed by the end ofJuly, returning Solar Star to full operation."
SolarStar sells electricity to EdisonInternational subsidiary Southern California Edison Co. under a 20-year powerpurchase agreement.