We assigned our 'BB-' rating to NRG's proposed $700 million senior unsecured notes, announced today. The recovery rating remains at a '3', indicating meaningful (i.e., 50%-70% recovery) recovery of principal in the event of a payment default. The point estimate of unsecured recovery declined to 66% from the earlier 75%. We already factored the potential issue of these notes into our analysis when we raised NRG's corporate credit rating to 'BB-' from 'B+' on May 22, 2009. The company will use note proceeds to terminate the Merrill Lynch credit sleeve and for general corporate purposes. NRG originally funded its acquisition of Reliant Energy Inc.'s retail business with cash. Pro forma for this transaction, funds from operations (FFO) coverage of interest
