Standard&Poor's ratings and stable outlook on Calpine Corp. ('BB' corporate credit rating/Stable) are not under review for potential changes. Standard&Poor's views the renegotiated contracts between Calpine and the California Department of Water Resources as a slightly positive event, in that it removes much of the uncertainty surrounding the contracts' viability. However, the renegotiated contracts appear to be cash flow neutral, or slightly positive in the near-to-medium term, and create greater price uncertainty in the long term. The planned use of the roughly $800 million equity issuance to pay down debt is viewed as a positive event in that it reduces leverage and increases funds from operations to interest coverage ratios. However, the change in capital structure
