Fitch ups Dynegy, Mirant, NRG, Reliant outlooks to positive

Fitch Ratings said it revised outlooks of the following companies to positive from stable: Dynegy Inc., Dynegy Holdings Inc., Mirant Corp., Mirant North America, LLC, Mirant Mid-Atlantic, LLC, Mirant Americas Generation, LLC, NRG Energy, Inc. and Reliant Energy, Inc.

Credit quality is improving for these companies, driven by shrinking reserve margins and the attendant rise in market- clearing heat rates, as well as significant incremental cash flows from capacity markets, Fitch noted.

Owners of coal and nuclear generation are realizing higher margins from both merchant sales and the resetting of contracts at higher prices as lower priced legacy hedges expire, the agency said.

Fitch added that it expects these capacity revenues will remain robust for the intermediate term while noting that higher capacity prices are also increasing regulatory and political risk.

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