TEXT - S&P comments on Capital Power LP and ENMAX Corp
Dec 6 - Standard & Poor's Ratings Services today said that the announced joint venture between Capital Power L.P. (CPLP; BBB-/Stable/--) and ENMAX Corp. (BBB+/Stable/--) to build, own, and operate the Shepard Energy Centre does not affect the ratings on CPLP, its parent, Capital Power Corp. (CPC; BBB-/Stable/--) or ENMAX. We expect the transaction to close in first-quarter 2013. We believe the joint venture is credit neutral for CPLP and CPC because the financing plan that management has proposed in combination with the current price forecast for electricity, does not cause deterioration of the cash flow adequacy of CPLP below the thresholds consistent with its current rating. In addition, we believe that the joint venture's rating impact on ENMAX to be relatively neutral. The announcement with respect to Shepard is consistent with the company's previously announced intention to find a joint-venture partner. Moreover, although the joint venture will reduce ENMAX's financial commitment to the project, the nature of the tolling agreement with CPLP will result in an increase in imputed debt (Standard & Poor's-calculated), which means the overall impact on our adjusted financial metrics will be generally neutral.
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