Fitch: Reliant Energy view negative

Fitch Ratings said it affirmed Reliant Energy Inc.'s B issuer default rating, BB/RR1 senior secured debt, B+/RR2 senior unsecured debt and B short-term issuer default rating.

The outlook was revised to negative from stable.

The action follows Reliant's revised 2008 outlook due to the financial impact of Hurricane Ike on the company's retail business and lower prices at its wholesale power business, according to the agency.

Reliant also said it will end its credit-enhanced retail structure with Merrill Lynch and raise $1 billion comprising a $650 million term loan and $350 million in convertible preferred stock to help facilitate the unwinding of the credit sleeve.

Fitch said the outlook reflects less favorable prospects facing the company's core retail and wholesale power businesses, along with the unwinding of the credit sleeve.

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