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20 Dec 2007
Moody's upgrades the ratings for Mirant and its subsidiaries
Approximately $5 billion of debt securities affected
New York, December 20, 2007 -- Moody's Investors Service upgraded the ratings of Mirant Corporation (Mirant:
Corporate Family Rating to B1 from B2) and its subsidiaries Mirant Mid-Atlantic,
LLC (MIRMA: pass through trust certificates to Ba1 from Ba2),
Mirant North America, LLC (MNA: senior unsecured to B1 from
B2 and senior secured to Ba2 from Ba3) and Mirant Americas Generation,
LLC (MAG: senior unsecured to B3 from Caa1). Additionally,
Mirant's Speculative Grade Liquidity (SGL) rating was revised to SGL-1
from SGL-2. The rating outlook is stable for Mirant,
MNA, MAG, and MIRMA.
"The ratings upgrade reflects a significant improvement in Mirant's
consolidated cash flow and financial metrics driven by declining reserve
margins and an increase in the price paid for power and capacity in the
markets that Mirant operates" said Moody's Vice President
Scott Solomon. "These market conditions are expected to remain
favorable for Mirant for at least the next several years".
Specifically, the ratings upgrade reflects an expectation that Mirant's
consolidated ratio of adjusted consolidated cash from operations (before
changes in working capital) to adjusted consolidated debt to be at least
15% and CFO pre W/C to adjusted interest expense to be at least
3 times over the next several years under most reasonable scenarios.
These ratios, as calculated by Moody's, are projected to be
approximately 18% and 3 times at year-end.
Mirant's sound financial metrics, however, are balanced
by the merchant power generator's business risk profile, limited
fuel and geographic diversification, a sizable near-term
capital expenditure program and a financial policy that has been geared
toward shareholder rewards.
The revision of the Speculative Grade Liquidity rating to SGL-1
reflects our expectation that Mirant will maintain a very good liquidity
profile over the next 12-month period as a result of its generation
of strong internal cash flows, maintenance of significant cash balances
and access to substantial revolving credit availability.
A Credit Opinion with additional details and ratings rationale will be
posted on www.moodys.com.
The following ratings/LGD assessments were affected by this action:
Mirant Corporation, Corporate Family Rating upgraded to B1 from
B2;
Mirant Corporation, Probability of default rating upgraded to B1
from B2;
Mirant Mid-Atlantic, LLC
Approximately $940 million pass through certificates upgraded to
Ba1 (LGD 2, 15%) from Ba2 (LGD 2, 12%);
Mirant North America, LLC
$850 million 7.375% senior unsecured bonds due 2013
upgraded to B1 (LGD 4, 55%) from B2 (LGD 4, 52%);
$800 million senior secured revolving credit facility due 2013
upgraded to Ba2 (LGD 2, 21%) from Ba3 (LGD 3, 32%);
$556 million (originally $700 million) senior secured term
loan due 2013 upgraded to Ba2 (LGD 2, 21%) from Ba3 (LGD
3, 32%);
Mirant Americas Generation, LLC
$850 million 8.3% senior unsecured notes due 2011
upgraded to B3 (LGD 5, 85%) from Caa1 (LGD 5, 85%);
$450 million 8.5% senior unsecured notes due 2021
upgraded to B3 (LGD 5, 85%) from Caa1 (LGD 5, 85%);
$400 million 9.125% senior unsecured notes due 2031
upgraded to B3 (LGD 5, 85%) from Caa1 (LGD 5, 85%).
Mirant Corporation, headquartered in Atlanta, Georgia,
is an independent power producer that owns or leases a portfolio of electricity
generating facilities totaling 10,300 megawatts.
New York
William L. Hess
Managing Director
Corporate Finance Group
Moody's Investors Service
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653
New York
Scott Solomon
Vice President - Senior Analyst
Corporate Finance Group
Moody's Investors Service
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653
No Related Data.
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