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S&P Upgrades Reliant to Accumulate
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Tuesday April 01, 2003 (3:35 pm ET)

S&P Upgrades Reliant to Accumulate

Also: Analysts' opinions on Best Buy and Hispanic Broadcasting. Plus more...
Reliant Resources (RRI): Upgrades to 4 STARS (accumulate) from 3 STARS (hold) Analyst: Craig Shere

Reliant is up 8%, as it announced a $6.2 billion bank refinancing package that alleviates near-term liquidity issues. Management says the terms of the package are in keeping with previous assumptions. S&P sees fears about the recent FERC decisions and staff report as overblown. FERC has not acted on recommendations of profit disgorgement (another lengthy issue, if it arises) and Reliant believes it is still owed net receivables from California after refunds. With shares trading near the bottom of the energy-merchant group based on the price/book value, S&P now see Reliant's discount as unjustified.