S&P; Recants Move on Calpine Credit Rating

Standard & Poor’s retracted an announcement that it may reduce San Jose-based Calpine Corp.’s credit rating half an hour after its release Monday, saying the statement was based on inaccurate information.

Calpine’s stock and debt rallied after S&P; recanted its statement that the power generator planned to secure a new line of credit with company assets, which would have made bondholders less secure in the event of a bankruptcy.

But later Monday, after the S&P; retraction, Calpine said it was in fact considering a “new, expanded and secured credit facility” to improve its cash position. Calpine had said previously that a $1-billion credit line it’s arranging would be unsecured.

“We’ll have more details when we make our announcement,” said spokeswoman Katherine Potter. She declined to say how big the new credit line would be or when an announcement may be made.

The first S&P; announcement immediately sent Calpine stock tumbling to $6.15 from $6.56 in New York Stock Exchange trading. After the retraction the shares rebounded to close at $6.83, down 28 cents for the day.

S&P; spokeswoman Rebecca Hill said the debt rating firm’s statement was “a publishing error.” S&P; said Calpine’s rating remained at BB-plus.