Fitch Ratings is calling the creation of energy trading firm, CalBear Energy LP, through a joint venture by Calpine Corp. and The Bear Stearns Companies Inc., a “favourable development” for Calpine.

Power company Calpine and investment bankers, Bear Stearns, have agreed to form CalBear, a new energy marketing and trading venture. The firm will be an indirect wholly-owned subsidiary of Bear Stearns, that will trade natural gas and power contracts as well as create structured products for sales and trading to hedge funds and other underlying institutional and municipal clients of Bear Stearns, Fitch explains.

It notes that as part of the arrangement, Calpine has formed its own wholly-owned subsidiary, Calpine Merchant Services Company Inc., which will utilize its existing energy trading infrastructure to perform exclusive natural gas and power trading and various back office support functions on behalf of CalBear. Risk management will be governed by Bear Stearns. In exchange for providing these services, CPN will receive 50% of the venture’s ongoing profits generated from third party energy services.

While the rating agency calls the deal “a favourable credit development” for Calpine, no immediate rating change is expected. It says that Calpine should ultimately be able to realize higher spark spreads as well as broaden its counterparty base and range of products and services through this new venture.