Fitch may cut Edison Mission, Midwest Generation

Fitch Ratings said it placed on Rating Watch negative Edison Mission Energy's issuer default rating of BB-, senior unsecured debt at BB- and short-term issuer default rating of B.

The agency also placed on watch Midwest Generation's issuer default rating of BB, secured credit agreement at BBB- and short-term issuer default rating of B.

Fitch said the possible downgrade reflects the sharp decline in prices of power and natural gas caused by lower demand due to cyclical forces along with higher-than-expected natural gas supplies from non-traditional resources.

Ratings also consider future investment requirements at the companies to comply with environmental regulations and investment commitments at Edison Mission to expand its presence in national renewable markets, the agency said.

At the end of the first quarter, Edison Mission's debt-to-EBITDA ratio was 5.9 times.

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