TEXT-S&P release on Northeast Biofuels LLC

(The following statement was released by the rating agency)

July 25 - Standard & Poor's Ratings Services lowered its rating on
Northeast Biofuels LLC's $140 million senior secured term loan to 'B-' from
'B'. At the same time, Standard & Poor's removed the rating from CreditWatch
with negative implications. The outlook is negative. The company is building,
and will operate, a 100 million gallon per year dry-mill ethanol facility in
Fulton, N.Y.

The downgrade results from further delays in construction, negative
amendments to the credit agreement, and the elimination of the crush margin
hedging agreement. In July 2008, Northeast Biofuels entered into a second
waiver, consent, and amendment agreement with the project lenders.

Even if the plant achieves construction completion by the amended date,
higher gross level of debt and the decrease in the period of operations prior
to debt maturity raise ongoing debt service payments and refinancing risk at
maturity. In the current volatile market, where corn prices fluctuate widely
and ethanol is currently priced at a discount to gasoline, Northeast Biofuels
may have difficulty servicing its fixed obligations with funds from
operations. The amended agreement may free up some cash to service debt over
the next year, but the rating would be lowered further if it is apparent that
the project lacks sufficient funds to meet its fixed obligations over a
twelve-month period. The outlook could change to stable if the project is able
to pay down a significant portion of debt and improve cash flows going forward.

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(New York Ratings Team)