Moody's may cut Reliant

Moody's Investors Service said it said in a corrected release that it placed the Ba3 corporate family rating for Reliant Energy and its subsidiaries, Orion Power Holdings and Reliant Energy Mid-Atlantic Power Holdings, on review for possible downgrade.

The last rating action for Reliant was on April 28, when Moody's said it upgraded the corporate family rating to Ba3 from B2.

The review for possible downgrade is prompted by Reliant's Securities and Exchange Commission Form 8-K filing made on Sept. 29, which discloses the magnitude of the business disruption to Reliant's retail electric provider business activities and updated the expected near-term outlook for the wholesale generation business activities, the agency noted.

According to the company, the previous expectations for an improved financial performance in 2008, increased operating cash flows and a transition to generating positive free cash flow appears unlikely over the near-term.

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