S&P upgrades Reliant

Standard & Poor's upgraded Ratings on Reliant Resources Inc. including raising Orion Power Holdings Inc.'s $200 million 4.5% convertible senior notes due 2008 and $375 million 12% senior notes due 2010 to CCC+ from CC and Reliant Energy Mid-Atlantic Power Holdings LLC's passthroughs to B from CCC. The CreditWatch was changed to developing from negative.

S&P said the upgrade follows Reliant's completion of its $6.2 billion global bank refinancing, which eliminates the immediate threat of insolvency by pushing off any substantial debt maturities to May 2006, and provides the company with an additional $300 million in liquidity to support collateral postings.

It also allows Reliant to exercise its option to purchase Texas GenCo Holdings Inc. if it so desires.

The developing CreditWatch reflects the overhang of the FERC's show cause order relating to power trading during the California energy crisis, S&P said. The penalty for this may be a revocation of Reliant's authority to sell power at market-based rates.

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