S&P may change Constellation Energy credit rating

NEW YORK, Sept 17 (Reuters) - Standard & Poor's on Wednesday said it may change its credit ratings on Constellation Energy Group (CEG.N) amid concerns over the power supplier and utility owner's access to credit.

Constellation said on Wednesday its bankers reaffirmed their commitment to its $2 billion credit facility and that it was in talks with potential partners about "strategic alternatives." For details, see [ID:nN17419191]

The cost to insure Constellation's debt against default, which have more than doubled in recent days, improved on the news, before retracing gains to be little changed at 620 basis points, or $620,000 per year for five years to insure $10 million in debt, according to Markit Intraday.

S&P placed Constellation's ratings on watch "developing," indicating they may be raised, lowered or left unchanged at "BBB," the second lowest investment grade.

"The CreditWatch placement reflects the increased urgency for the company to execute on its recently announced asset divestment plan and to complete other credit supportive strategic initiatives to shore up its balance sheet in the face of a broad loss of market confidence," S&P said in a statement.

It "also reflects the curtailing of business activities by a few counterparties," S&P added.

Options being considered by Constellation include selling the company, and management has told the rating agency talks on this are at an advanced stage, S&P said.

S&P said it confirmed that Constellation's credit lines are in place, adding "Constellation is facing an acute crisis of confidence that has resulted in a decline in its stock price and a widening in its five-year CDS spreads."

"Constellation's large global commodities operations rely heavily on sustained counterparty confidence, and curtailment of business by these counterparties has the potential to impair Constellation's ability to conduct its commodities operations," S&P said.

(Reporting by Karen Brettell; Editing by Walker Simon),