Reportedly faced with crippling trading losses from over-exposure in the oil futures market, MGAG
nearly was forced into bankruptcy before its creditors, including Deutsche Bank AG, stepped in with an emergency loan and rescue package.
STRONG SUPPLY CONTRACTS: MGAG
provides all-requirements gas supply to 77 municipal gas distribution system members pursuant to long-term gas supply contracts, including take-or-pay supplemental contracts, which obligate the members to pay all costs related to the gas portfolio III project on an unconditional basis.
and CMC will be major participants in the structure while Okaloosa Gas District (Florida), City of Pensacola (Florida), The Southeast Alabama Gas District (Alabama) and The Tennessee Energy Acquisition Corporation (Tennessee) will be the minor participants.
is the largest natural gas non-profit, joint-action agency providing gas supply and related services to 75 municipalities that own and operate natural gas distribution systems in Georgia, Alabama and Florida who serve over 175,000 customers.
STRONG FINANCIAL METRICS: MGAG
exhibits financial metrics consistent with the current rating category including total debt/funds available for debt service of 1.
has been in operation since 1987 and serves 73 member municipalities that provide gas service to more than 145,000 residential, commercial and industrial customers.
In 1991, MGAG
acquired overriding royalty interests in natural gas reserves totaling over 100 billion cubic feet of gas and deliverability of 50,000 MMBtu per day over 5 to 6 years.
Change in Participating Member Ratings: The long-term rating on the PGP bonds will continue to reflect the credit of the underlying financing participants, specifically the two largest participants, MGAG
and SEAGD, whose default could not be restored by the required 25% step-up provision.
This plan does not contemplate the sale by MGAG
of its investment in MMC or the sale of any other assets.
As part of its consideration of the acquisition of the assets and the proposed issuance of common shares to MGAG
, the board of directors of MMC appointed a special committee comprised of members of the board who are independent of MGAG
In addition, MGAG
is exposed to refinancing risk on its one-year notes.
While a purchase price has yet to be settled, the independent committee of Metall has retained NM Rothschild & Sons Limited of London, England to prepare a valuation of the MGAG
copper smelting assets.