Moody's: LSP Energy on review for upgrade

Moody's Investors Service said it placed the B2 senior secured debt rating of LSP Energy LP under review for possible upgrade.

The rating action incorporates the Dec. 5, 2003 emergence of its parent, NRG Energy Inc, (B2 senior implied rating) from bankruptcy as well as the improved financial prospects for NRG to operate its business plan. LSP Energy is a wholly-owned subsidiary of NRG and its plant is operated by NRG management.

Moody' said the rating review will consider the improved financial profile of NRG, LSP Energy's parent, and will examine the historical and projected operating performance of the project. Moody's noted that LSP Energy has substantially underperformed the original expectations for the project, and future coverages for the project are anticipated to remain weak, which limits the potential magnitude of any upgrade.

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