Moody's: Energy Future negative

Moody's Investors Service said it changed the outlook for Energy Future Holdings Corp. and its subsidiaries to negative from stable, including Texas Electric Competitive Holdings Co. LLC. The outlook for Energy Future's other subsidiary, Oncor Electric Delivery Co, LLC, remains stable.

The outlooks for Energy Future Intermediate Holding Corp. and Energy Future Competitive Holdings were also changed to negative from stable.

Moody's said it affirmed Energy Future's Caa2 corporate family rating, Caa3 probability of default rating, SGL-4 speculative grade liquidity rating and the Baa1 senior secured rating for Oncor.

The change in rating outlook to negative from stable reflects a sustained period of low natural gas prices which will depress Energy Future's cash flow generating prospects and could result in further large goodwill impairments, Moody's said.

The agency also said it sees declining volumes and an increase in operating costs and capital investment needs. These higher costs and investments are influenced, in part, by increased regulatory requirements that apply primarily to the company's coal generation assets.

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