Fitch downgrades Ameren

Fitch Ratings said it downgraded the issuer default rating and senior unsecured debt ratings of Ameren Corp. and its merchant generation subsidiary, Ameren Energy Generating Co., to BBB from BBB+ and affirmed their short-term issuer default ratings at F2.

The outlook for both companies is stable.

The agency said the downgrade of Ameren Energy Generating reflects an expected decline in 2010 earnings and cash from operations, driven by lower power prices and energy margins, and Fitch's expectation that power prices and demand in the Midwest region where the company operates will remain relatively weak through 2012.

The ratings and stable outlook also consider the meaningful cost reductions implemented in 2009 and 2010, which Fitch said should obviate the need for debt financing over the next several years and support the investment-grade ratings.

The downgraded ratings of Ameren better reflect the combined creditworthiness of its operating subsidiaries and its three Illinois distribution utilities, the agency said.

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