The rating on Calpine Corp. (B/Negative/--), a San Jose, Calif.-based corporation that develops, acquires, owns, and operates 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 0.9x on a 12-month rolling period ending Sept. 30, 2004. 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 interest coverage to remain near 1x, even under stress scenarios. Overall business risks have increased. Calpine's monetization of contractual revenue and sales of its gas assets and assets with contractual revenues
