S&P lowers GenOn, debt

Standard & said it lowered its corporate credit ratings on GenOn Energy Inc. and its affiliate GenOn Energy Holdings Inc. to CCC+ from B-.

The outlook is stable.

Because of the change in the corporate credit rating, the agency also lowered the issue ratings on the $1.95 billion of unsecured notes at GenOn Energy, the issue rating on the $770 million of pass-through certificates ($665 million outstanding) at GenOn Mid-Atlantic LLC (GenMA) and the ratings on $850 million unsecured notes at GenOn Americas LLC (GenAM) to B- from B.

Similarly, the B+ issue rating on the $641 million of pass-through certificates (about $391 million outstanding) at REMA were lowered to B.

"The rating action follows a progressively weaker forward power curve due to depressed natural gas prices, and lower gross margins due to stagnating demand and milder weather patterns, resulting in a further weakening of financial measures," S&P credit analyst Aneesh Prabhu said in a news release.

"While the capacity performance incremental auctions provide some uplift in margins, they do not offset the energy margin compression."

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