S&P downgrades Reliant Energy

Standard & Poor's said it lowered its corporate credit rating on Reliant Energy Inc. and its subsidiaries to B+ from BB-.

The outlook is stable.

The agency said the downgrade reflects a likely negative contribution margin for 2008 from the retail business, as opposed to the original forecast of about $450 million; a one-third increase in total funded debt to support ongoing liquidity requirements; and expectations for lower profitability, poorer earnings visibility and higher liquidity risk for the retail business.

The stable outlook reflects S&P's assumption that Reliant will articulate a new business plan for the retail segment and the company's ability to sustain confidence with its trading counterparties in the near term, the agency said.

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