Moody's boosts Reliant

Moody's Investors Service said it upgraded the ratings of Reliant Energy, Inc.'s corporate family rating to Ba3 from B2, its probability of default rating to Ba3 from B2 and the ratings for two of its subsidiaries: Reliant Energy Mid-Atlantic Power Holdings (pass through certificates to Ba1 from Ba2) and Orion Power Holdings (senior unsecured to Ba3 from B2).

Additionally, Reliant's speculative-grade liquidity rating was revised to SGL-1 from SGL-2, the agency noted.

The outlook is stable.

"The rating upgrades reflect the improved operations and financial performance of the company, the reduction of outstanding debt over the past several years and an expectation that Reliant will continue to produce key cash flow related financial credit metrics such as funds from operations to adjusted total debt of over 20% and free cash flow to adjusted total debt over in the low to mid-teen's, on a sustainable basis," said Moody's vice president Jim Hempstead.

"Coupled with a revised financial strategy that limits consolidated leverage and respects the volatility inherent with operational cash flow, we believe Reliant can maintain its recently improved financial characteristics over the next several years."

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