The rating on Calpine Corp. (B/Negative/--), a San Jose, Calif.-based corporation engaged in the development, acquisition, ownership, and operation of power generation facilities, reflects the following risks: Calpine's credit statistics are weak. For example, adjusted funds from operations (FFO) interest coverage was low at 1.1x in 2003. In addition, Standard&Poor's Ratings Services 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 interest coverage to remain above 1.0x, even under a severe stress scenario. Overall business risks have increased. Calpine's monetization of contractual revenue and sales of assets with contractual revenues will increase cash flow
