Calpine's ratings affirmed at 'B2'; outlook stable - Moody's
02.04.08, 1:02 AM ET
BANGALORE (Thomson Financial) - Moody's Investors Service has affirmed power generation company Calpine Corp's corporate family and probability of default ratings, senior secured term loan and revolving credit facility at 'B2' following the company's emergence from bankruptcy.
Moody's (nyse: MCO - news - people ) also assigned a speculative grade liquidity rating of 'SGL-3' to Calpine (other-otc: CPNLQ.PK - news - people ), reflecting an expectation for adequate liquidity over the next twelve months.
The outlook for the company is stable and incorporates the rating agency's expectation that the company will likely generate financial metrics that remain in-line with other independent power companies whose corporate family rating is 'B2.'
The affirmation reflects the degree of uncontracted revenues and resulting cash flow expected to be generated by Calpine's largely natural-gas fired merchant generation fleet over the next several years, Moody's said in a statement.
Moody's believes that Calpine's cash flow coverage of interest expense should range between 1.5- 1.9 times over the same three-year time frame.
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