S&P Credit Research



Title:

Bulletin: Lower First-Quarter Earnings Won't Affect Constellation Energy Group's Ratings

Price:$100.00
Publication Date:Apr 30, 2008
Report Type:News
Abstract:NEW YORK (Standard&Poor's) April 30, 2008--Standard&Poor's Ratings Services said today that Constellation Energy Group Inc.'s (BBB+/Negative/A-2) corporate credit ratings and outlook are not affected by its lower-than-anticipated first-quarter 2008 earnings. Lower earnings were mainly the result of decreased earnings at the commodities group, driven by, among others things, coal-supplier defaults, the negative consequences of hedge ineffectiveness, and proprietary trading positions that have unrealized mark-to-market losses. We note the ineffectiveness in hedge positions as emblematic of the inherent risks in the wholesale and retail business, including but not limited to load-shaping, fuel, and volume risks. Moreover, hedging commodity exposures is not easy or always possible when historic correlations between commodities deviate. While the unrealized losses are currently
Ticker:CEG
Issuer:Constellation Energy Group Inc.
GICS:Independent Power Producers & Energy Traders (55105010)
Sector:Global Issuers, Financial Institutions, Corporations, Utilities, Electric
Country:United States
Region:United States
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S&P Credit Research

S&P Credit Research provides analysis on issuers and debt obligations of corporations, states and municipalities, financial institutions, insurance companies and sovereign governments. S&P also offers insight into the credit risk of structured finance deals, providing an independent view of credit risk associated with a growing array of debt-securitized instruments.

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