TEXT-Moody's release on Reliant Energy

(The following statement was released by the rating agency)

Approximately $3.8 billion of debt and bank credit facilities affected

April 28 - Moody's Investors Service upgraded the ratings of Reliant
Energy, Inc's (Reliant) Corporate Family Rating to Ba3 from B2, its Probability
of Default Rating to Ba3 from B2 and the ratings for two of its subsidiaries:
Reliant Energy Mid-Atlantic Power Holdings (REMA: pass through certificates to
Ba1 from Ba2) and Orion Power Holdings (Orion: senior unsecured to Ba3 from
B2). Additionally, Reliant's Speculative Grade Liquidity (SGL) rating was
revised to SGL-1 from SGL-2. The rating outlook is stable for Reliant, REMA and
Orion.
"The rating upgrades reflect the improved operations and financial performance
of the company, the reduction of outstanding debt over the past several years
and an expectation that Reliant will continue to produce key cash flow related
financial credit metrics such as funds from operations to adjusted total debt
of over 20% and free cash flow to adjusted total debt over in the low to
mid-teen's, on a sustainable basis" said Moody's Vice President Jim Hempstead.
"Coupled with a revised financial strategy that limits consolidated leverage
and respects the volatility inherent with operational cash flow, we believe
Relaint can maintain its recently improved financial characteristics over the
next several years."
Reliant's ratings remain somewhat constrained by a high business and operating
risk profile which include wholesale merchant generation and retail electric
supply activities. In our opinion, Reliant's consolidated cash flows can be
meaningfully affected by changes in commodity prices, weather and other
market-related conditions that remain outside of management's control.
The stable rating outlook for Reliant, REMA and Orion incorporate a view that
management's revised corporate finance policies that address consolidated
leverage through the longer-term nature of its business' cyclicality and
seasonality will not result in material shareholder reward transactions that
negatively impact the credit.
The revision of the Speculative Grade Liquidity rating to SGL-1 reflects our
expectation that Reliant will maintain very good liquidity over the next
12-month period as a result of its internal cash generation prospects,
maintenance of substantial cash balances, access to external revolving credit
availability, headroom under its primary financial covenant and potential for
alternate sources of liquidity through non-core asset dispositions.
A Credit Opinion with additional details and rating rationale will be posted on
www.moodys.com.
Reliant Energy is a large wholesale merchant generator with approximately 14
GWs of generating capacity diversified across several market regions in the
U.S. In addition, Reliant is a large retail electric provider in Texas, serving
almost 2 million customers, primarily in the greater Houston, Texas region.
Reliant reported $11.2 billion in revenues for the year ended 2007 and is
headquartered in Houston, Texas.
Upgrades:
..Issuer: Orion Power Holdings, Inc.
....Senior Unsecured Regular Bond/Debenture, Upgraded to a range of 42 - LGD3
to Ba3 from a range of 51 - LGD4 to B2
..Issuer: Pennsylvania Economic Dev. Fin. Auth.
....Senior Secured Revenue Bonds, Upgraded to a range of 48 - LGD3 to Ba3 from
a range of 49 - LGD3 to B2
..Issuer: Reliant Energy Inc.
....Issuer Rating, Upgraded to Ba3 from B3
....Probability of Default Rating, Upgraded to Ba3 from B2
....Speculative Grade Liquidity Rating, Upgraded to SGL-1 from SGL-2
....Corporate Family Rating, Upgraded to Ba3 from B2
....Multiple Seniority Shelf, Upgraded to a range of 96 - LGD6 to (P)Ba3 from a
range of 97 - LGD6 to (P)B2
....Senior Secured Regular Bond/Debenture, Upgraded to a range of 48 - LGD3 to
Ba3 from a range of 49 - LGD3 to B2
....Senior Unsecured Regular Bond/Debenture, Upgraded to B1 from B3
..Issuer: Reliant Energy Mid-Atlantic Power Hldgs., LLC
....Senior Secured Pass-Through, Upgraded to a range of 20 - LGD2 to Ba1 from a
range of 21 - LGD2 to Ba2
Outlook Actions:
..Issuer: Orion Power Holdings, Inc.
....Outlook, Changed To Stable From Rating Under Review
..Issuer: Reliant Energy Inc.
....Outlook, Changed To Stable From Rating Under Review
..Issuer: Reliant Energy Mid-Atlantic Power Hldgs., LLC
....Outlook, Changed To Stable From Rating Under Review
Withdrawals:
..Issuer: Reliant Energy Inc.
....Senior Subordinated Conv./Exch. Bond/Debenture, Withdrawn, previously rated
96 - LGD6
(New York Ratings Team)