Fitch upgrades DTE

Fitch Ratings said it upgraded the long-term issuer default ratings for DTE Energy Co. to BBB+ from BBB, and DTE Electric Co. to A- from BBB+.

In addition, the agency affirmed the long-term issuer default rating for DTE Gas Co. at BBB+.

The outlook for all entities is stable.

Fitch also affirmed the short-term ratings for DTE, DTE Electric and DTE Gas at F2.

More than $9 billion of consolidated long-term debt is affected by these actions.

Fitch said the upgrade reflects the strong and relatively predictable earnings and cash flows of DTE’s core electric and natural gas distribution utilities. The rating action follows recent Michigan Public Service Commission regulatory orders that were more favorable than anticipated, in the agency’s opinion, and considers the credit supportive regulatory framework in Michigan.

The rating also considers DTE's large, utility-focused capex program. Fitch estimates that greater than 90% of consolidated DTE earnings over the next several years will be from regulated business including utility and pipeline operations.

DTE Electric is expected to remain the primary driver of consolidated earnings and cash flows, comprising roughly two-thirds of consolidated EBITDAR through the latest LTM period, the agency said.

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