TEXT-Moody's release on LSP Energy Ltd

(The following statement was released by the rating agency)

Approximately $ 260 Million of Debt Securities Affected.

March 11 - Moody's Investors Service affirmed LSP Energy Ltd's (LSP or
Project) B1 rating for its senior secured bonds but changed the outlook to
negative from stable.
The rating action reflects LSP's weakened financial performance demonstrated by
a decrease in LSP's debt service coverage ratio to below 1.0 times in 2007,
which is notably lower than the Project's debt service coverage ratio of 1.1
times over the previous two years. The deteriorating financial performance has
been driven in large part by two major forced outages incurred by the Project
in 2007 with the last outage ending in early 2008. The forced outages resulted
in LSP incurring significant revenue losses under its tolling agreements and
increased costs due to repairs.
Recently, the Project entered into a long-term services agreement (LTSA) with
the manufacturer of the project's gas turbines. Moody's considers the LTSA to
be a positive development and should serve to partially mitigate a cause for
one of the Project's two major outages.
While Moody's expects LSP's debt service coverage ratios to improve modestly to
approximately 1.0 times in 2008, the negative outlook also incorporates LSP's
limited access to liquidity and the potential that LSP could continue to
experience poor operating performance. If debt service coverages persist at or
below current levels or LSP is forced to access its six month debt service
reserve for liquidity purposes, LSP could face further negative pressures on
its rating.
LSP Energy Limited Partnership is a limited partnership that owns and operates
an 837 MW combined-cycle natural gas-fired electric generating facility located
in Batesville, Mississippi. LSP is 96% owned by Complete Energy Holdings
(Complete), a privately held operator of electric generation. Complete is
headquartered in Houston, Texas and is approximately 100% owned by individuals.
(New York Ratings Team)