S&P lowers Constellation

Standard & Poor's said it lowered the corporate credit rating on Constellation Energy Group Inc. and affiliate Baltimore Gas & Electric Co. to BBB from BBB+.

The outlook is stable.

According to S&P, the downgrade is based on Constellation's liquidity following recently disclosed incremental downgrade collateral requirements for the customer supply and global commodities activities relating to non-standard contracts.

Ratings are increasingly influenced by riskier merchant operations that should rise to more than 75% of gross margins in 2008 and increasingly drive the issuer's credit profile, the agency said.

The stable outlook reflects financial measures that are adequate for the rating level, S&P noted.

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