Moody's rates Duke Energy

Moody's Investors Service said it assigned a Baa2 issuer rating to Duke Energy Corp., the newly formed holding company as the parent company for the former Duke Energy and Cinergy Corp.

Moody's said it also upgraded the long-term debt ratings of subsidiaries Duke Power LLC (senior unsecured debt to A3 from Baa1), Duke Capital LLC (senior unsecured to Baa2 from Baa3) and Texas Eastern Transmission LP (senior unsecured to Baa1 from Baa2).

The short term rating for commercial paper for Duke Power was confirmed at Prime-2, the agency added, noting that the short term rating for commercial paper for Duke Capital was affirmed at Prime-3.

The outlook is positive for Duke Energy and Duke Power. The outlook is stable for Duke Capital and Texas Eastern.

Moody's said it affirmed the ratings for Cinergy Corp. (Baa2 senior unsecured), Cincinnati Gas and Electric (Baa1 senior unsecured), Union Light, Heat and Power (Baa1 senior unsecured) and PSI Energy (Baa1 senior unsecured), which were not under review.

Duke Energy's Baa2 issuer rating reflects the relative stability and predictability of its rate-regulated electric and natural gas operations, which represent 80% to 85% of consolidated revenues, earnings, cash flows and assets, the agency added.

The upgrade for Duke Power reflects the substantial reduction in its business and operating risk profile as a result of the distribution of its ownership interests in Duke Capital to its new parent holding company, Duke Energy, Moody's said.

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