The ratings lowered were El Paso Electric Co.'s first mortgage bonds to B3 from B1, Del Norte Funding Corp.'s secured lease obligation bonds to Caa from B2, and El Paso Funding Corp.'s unsecured lease obligation bonds to CAA from B3. The agency confirmed El Paso Electric Co.'s preferred stock at Caa. Duff & Phelps Credit Rating Co. downgraded El Paso's first mortgage bonds to CCC from BB, and the Del Norte Funding Corp.'s secured lease obligation bonds to DD, or defaulted debt, from BB-minus, the agency said in release. Del Norte is a separate company from El Paso, but the two are linked by a sale/lease back agreement, William A. Abrams, a Duff & Phelps analyst explained.