Standard&Poor's Ratings Services' 'B' corporate credit rating on Calpine Corp., a San Jose-based corporation engaged in the development, acquisition, ownership, and operation of power generation facilities, reflects the following risks: -- Calpine's credit statistics have significantly deteriorated. For example, adjusted funds from operations (FFO) interest coverage dropped to 1.5x in 2002 from 2.2x in 2001, which is significantly below expectations. The deterioration is due to lower power prices on the merchant portfolio and higher levels of debt than anticipated. In addition, Standard&Poor's expectation over the next five years is that minimum and average adjusted FFO interest coverage ratios will not exceed 1.3x and 1.9x, respectively, assuming no additional development. However, Standard&Poor's expects FFO-to-interest coverage
