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PHLLIB-0407549.01-MBPOLLAC
January 17, 2001 11:10 AM
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) January 18, 2001
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Caithness Coso Funding Corp.
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(Exact name of registrant as specified in its charter)
Delaware 333-83815 94-3328762
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
Coso Finance Partners California 68-0133679
Coso Energy Developers California 94-3071296
Coso Power Developers California 94-3102796
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(Exact names of Registrants as (State or other (IRS Employer
specified in their charters) jurisdiction of Identification No.)
incorporation)
1114 Avenue of the Americas, 41st Floor, New York, New York 10036-7790
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212) 921-9099
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Not Applicable
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(Former name or former address, if changed since last report.)
<PAGE>
Item 5. Other Events.
The Coso projects consist of three 80 MW geothermal power plants,
called Navy I, BLM and Navy II (together, the "Coso partnerships"), their
transmission lines, wells, gathering system and other related facilities. The
Coso projects are located near one another in the Mojave Desert approximately
150 miles northeast of Los Angeles, California, and have been generating
electricity since the late 1980s. The Coso partnerships sell 100% of the
electrical energy generated at the plants to Southern California Edison
("Edison") under three long-term Standard Offer No. 4 power purchase agreements.
Caithness Coso Funding Corp.("Funding Corp.")is a single-purpose
Delaware Corporation formed to issue senior secured notes("Notes")for its
own account and as an agent acting on behalf of the Coso partnerships. On May
28,1999, Funding Corp. sold $413,000,000 of senior secured notes. Pursuant to
separate credit agreements between Funding Corp. and each partnership ("Credit
Agreements"), the net proceeds from the offering of the Notes were loaned to the
Coso partnerships. Payment of the Notes is provided for by payments made by the
Coso partnerships under their respective project loans. Funding Corp. has no
material assets, other than the project loans, and does not conduct any
operations apart from issuing the Notes and making the project loans to the
Partnerships.
Pursuant to each Credit Agreement,each Coso partnership is required
to make project loan payments in scheduled installment amounts which, in the
aggregate, are sufficient to enable Funding Corp. to pay scheduled principal and
interest on the Notes. Payments are due on June 15 and December 15 of each year.
Each Coso partnership funds its loan payments from the payments for energy
received from Edison.
Moodys Investor Services downgraded Funding Corp's Notes on January
17, 2001 to "Caa2" reflecting their recent downgrade of Edison to a similar
rating. Standard & Poors and Fitch have recently also downgraded Edison to "D".
Standard & Poors and Fitch have placed Funding Corp's Notes on Credit Watch
Negative but as of the date of this filing have not downgraded Funding Corp's
Notes.
On January 16, 2001, Edison announced that it was temporarily suspending
payments for energy pending a permanent solution to its liquidity crisis. Edison
has not made payments to the Coso partnerships for power generated in November
2000. This payment of approximately $13.3 million was due in early January. The
Coso partnerships have also billed Edison approximately $32.5 million for power
generated in December 2000. Payment of this amount is due in February 2001. The
Coso partnerships have not yet billed Edison for energy provided in January
2001. To date the cost to Edison for this power would be approximately $20
million.
Funding Corp. has a debt service reserve of over $26 million. This
reserve is sufficient to make the next debt payment, which is due on June 15,
2001. The project also has a capital expenditure reserve in excess of $11.5
million, which can only be utilized for project capital expenditures under the
terms of the Notes. That amount is sufficient to cover the capital budget
for the current year. The project also has unrestricted cash which will be
utilized to pay operating expenses for a period of time.
Management of the Coso partnerships as well as other power generators
have been involved in continuing negotiations with Edison and state and federal
officials in an effort to solve the current situation. There can be no assurance
that a resolution will be reached or what the terms of any such resolution may
include.
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 Coso partnerships 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 the Coso partnerships. In connection with the safe harbor
provisions of the Reform Act, the Coso partnerships have identified important
factors that could cause actual results to differ materially from such
expectations, including resolution of the energy crisis in California, operating
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.
<PAGE>
SIGNATURES
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.
Date: January 18, 2001 CAITHNESS COSO FUNDING CORP.,
a Delaware corporation
By: /S/ CHRISTOPHER T. MCCALLION
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Christopher T. McCallion
Executive Vice President &
Chief Financial Officer
(Principal Financial and
Accounting Officer)
COSO FINANCE PARTNERS
a California corporation
By: /S/ CHRISTOPHER T. MCCALLION
----------------------------
Christopher T. McCallion
Executive Vice President &
Chief Financial Officer
(Principal Financial and
Accounting Officer)
COSO ENERGY DEVELOPERS
a California corporation
By: /S/ CHRISTOPHER T. MCCALLION
----------------------------
Christopher T. McCallion
Executive Vice President &
Chief Financial Officer
(Principal Financial and
Accounting Officer)
COSO POWER DEVELOPERS
a California corporation
By: /S/ CHRISTOPHER T. MCCALLION
----------------------------
Christopher T. McCallion
Executive Vice President &
Chief Financial Officer
(Principal Financial and
Accounting Officer)
