11 October 2002 – Mirant yesterday responded to Moody’s downgrading its ratings to near “junk” status by citing the actions the company has taken to strengthen its business and ensure product delivery to customers.

“We’re disappointed in this action, but not surprised,” said Ray Hill, chief financial officer, Mirant. “We’ve moved aggressively to strengthen liquidity and reduce trading and marketing activity to ensure that our business is able to service customers despite rating agency actions.”

“Ratings downgrades do not trigger any default or acceleration of debt obligations for Mirant, but they could require us to post additional collateral,” said Hill.

Mirant estimates that additional collateral requirements will be in the range of $300 million compared to its current liquidity of $1.7bn. “Importantly, this collateral estimate doesn’t take into account the flexibility we have to further reduce commercial activities and cut collateral needs,” said Hill.

Profile of Mirant’s Liquidity and Debt Position

* $1.7 billion in current liquidity
* Targeting approximately $500 million to $700 million in additional asset sales to further improve liquidity
* Announced $1.7 billion in asset sales year-to-date
* Recently eliminated $500 million in potential collateral triggers
* No significant debt maturities until mid-year 2003
* Repaid $1.2 billion in debt in 2002