Dynegy Stock Downgraded Below Junk
Sep. 06, 2002
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HOUSTON (AP) _ Moody's Investors Service downgraded Dynegy Inc. debt on Thursday, citing concerns about the energy marketer's financial future.
The downgrade includes Dynegy, which dropped from Ba3 to B2, and several of its subsidiaries. All were knocked down two notches from previous ratings in June which placed them below junk status.
``We are disappointed with Moody's decision, especially given the progress Dynegy has made to enhance our liquidity, stabilize our business and address the key issues of concern in the marketplace,'' Dynegy spokesman John Sousa said.
The Houston-based company is continuing to keep the rating agencies informed of its efforts and execution of plans to improve its financial position, Sousa added.
Moody's said the downgrade came because of concern about the company's cash flow and its ability to refinance debt obligations coming due next year.
The ratings outlook for Dynegy remains negative because of the risk associated with the company's restructuring plan, a lack of investor confidence in the company's trading business, federal investigations into the company and continuing reviews of Dynegy's financial statements for a three-year period beginning in 1999, Moody's said.
Two other credit ratings agencies, Standard and Poor's and Fitch Ratings, also downgraded Dynegy to junk status in recent months.
Shares of Dynegy fell 10 cents to close at $2.07 Thursday on the New York Stock Exchange.
On Monday, Dynegy lost its interim chairman, Glenn Tilton, who left to take over United Airlines parent UAL Corp.