Enron - Natural Gas Industry Message Board

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Gold/Mining/Energy : Enron - Natural Gas Industry

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To: Bryan Steffen who started this subject	12/19/2001 4:08:49 PM
From: Softechie	Read Replies (1) of 1433

*Fitch slashes Calpine credit ratings to junk status NEW YORK, Dec 19 (Reuters) - Fitch slashed Calpine Corp.'s (NYSE:CPN - news) credit ratings to junk status on Wednesday, affecting some $11.8 billion of the power producer's debt. ADVERTISEMENT ``The rating changes follow a review of the firm's liquidity and business prospects in light of turbulent market conditions that have impacted the company's access to the capital markets, and a generally more cautious outlook for the power generation business,'' Fitch said. Fitch lowered the rating on Calpine's unsecured debt by a notch to 'BB-plus' from 'BBB-minus', and it's convertible trust preferreds to 'BB-minus' from 'BB'. The rating agency said, while the power company's operating fundamentals are sound, the financial profile and business strategy is aggressive, and is not consistent with the current market environment. Earlier, Calpine said it plans to raise $400 million via a convertible offering. The San Jose, California-based company said it will sell the debentures due 2006 in a private placement under Rule 144A. The securities will be convertible into shares of Calpine common stock at a fixed conversion ratio to be determined and will bear interest at a rate to be determined. Proceeds will be used to repurchase a portion of the company's zero-coupon convertible debentures due 2021. Fitch said while it views Calpine's upcoming offering positively, it has opted to keep the firm's 'Rating Watch Negative' review status in place, until the firm demonstrates its ability to successfully meet its funding requirements for the remaining portion of zero-coupon notes not refinanced with its new offering.

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