The credit rating of power firm Contact Energy was lowered to BBB from BBB+ by Fitch Ratings, mainly due to its huge investment plans. Meanwhile, stocks of the firm declined 6c to $6.02 yesterday, as per the latest information gathered from the stock exchange.

The rating firm said: "The net loss is primarily due to continued deteriorating conditions in the commercial real estate market impacting Capmark's loan portfolio, downward pressure on fair values resulting in losses on its equity and real estate investments, increased provision expense, and an impairment charge on mortgage servicing rights and intangible assets."

David Baldwin, the Managing Director of power firm, said that the recent development would not affect on the company's interest costs, as it can be considered equivalent to an "investment grade" rating.

Contact Energy has drawn plans to invest $600 million into various energy and power generation projects.  The projects include an investment of $250m for power station at Stratford, the $250m Ahuroa for underground gas storage project, and $100m for the first phase of the Tauhara geothermal power project near Taupo.

The firm reported 50.4 per cent decline its net profit last month that stood at $117.5m in the reporting period.