Moody's cuts GenOn, subsidiaries

Moody's Investors Service said it downgraded GenOn Energy Inc.'s corporate family rating and senior unsecured rating to B3 from B2.

Additionally, the probability of default rating was downgraded to B3-PD from B2-PD.

Among its subsidiaries, GenOn Americas Generation, LLC's senior unsecured rating was downgraded to Caa1 from B3 and GenOn Mid-Atlantic's senior secured rating was downgraded to Ba3 from Ba2. GenOn REMA LLC's senior secured rating was confirmed at B2.

GenOn's speculative-grade liquidity rating was raised to SGL-3 from SGL-4.

The outlooks are now stable.

"Our decision to downgrade GenOn is mainly driven by its deteriorating long-term fundamentals, exacerbated by dividend restrictions at its REMA and GenOn Mid-Atlantic subsidiaries," Moody's vice president and senior analyst Toby Shea said in a news release.

"The recent price spikes driven by the cold weather have alleviated GenOn's near-term liquidity concerns and we have upgraded GenOn's liquidity rating accordingly. However, the cold winter was a transient event and is insufficient to change our view regarding GenOn's long-term credit profile."

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