MUMBAI (Thomson Financial) - Moody's Investors Service said it placed Sabine
Pass LNG, LP's 'Ba3' rating for its senior secured notes due 2013 and 2016 on
review for possible downgrade.
"The review for downgrade takes into account Sabine's extensive
relationships with Cheniere Energy, Inc. and the growing negative pressures on
Cheniere's financial and business prospects," Moody's said.
The ratings agency added recent developments in the LNG and capital markets
are likely to result in Cheniere reporting lower-than-expected cash flow
generation and dwindling liquidity over the next two years.
Moody's noted Sabine, which is 90.6 percent indirectly-owned by Cheniere
Energy, represents most of Cheniere's consolidated cash flows and operating
assets and has extensive contractual relationships with Cheniere and its
affiliates.
These factors serve as strong incentives to bring Sabine into a possible
bankruptcy of Cheniere in order for Cheniere to better control its estate,
Moody's said.
It added the review for downgrade will consider Cheniere's ability to
improve its liquidity position and cash flow generation to meet expected cash
uses over the next several years.
Moody's also said it will evaluate implications of Cheniere's financial
situation on Sabine and Sabine's ability to complete phase 2 construction, which
is scheduled to be completed toward the middle of 2009.
TFN.newsdesk@thomsonreuters.com
npr/ssa
COPYRIGHT
Copyright Thomson Financial News Limited 2008. All rights reserved.
The copying, republication or redistribution of Thomson Financial News Content,
including by framing or similar means, is expressly prohibited without the prior
written consent of Thomson Financial News.
|