Moody’s changes Duke Energy Ohio to positive

Moody's Investors Service said it revised the outlook for Duke Energy Ohio, Inc. (Baa1) to positive from stable and affirmed its existing ratings. The ratings of Duke Ohio's utility subsidiary, Duke Energy Kentucky, Inc. (Baa1 stable) were also affirmed. The outlook for Duke Kentucky remains stable. Duke Ohio is a subsidiary of Duke Energy Corp. (Baa1 stable).

The agency said the positive outlook reflects an expectation of continued strong cash flow metrics, for example a ratio of cash flow from operations excluding changes in working capital (CFO pre-WC) to debt in the range of 20%.

“Our view also considers Duke Ohio's ownership of the smaller, vertically integrated, and neighboring, electric and gas operations of Duke Kentucky,” Moody’s said in a news release.

The agency expects Duke Ohio's financial metrics to remain at levels that are strong for a high Baa-rated transmission and distribution utility.

“Going forward, we anticipate the ratio of CFO pre-WC to debt will remain in the high teens to 20% range. These metrics include the results of subsidiary Duke Kentucky, which are consolidated into the financial statements of Duke Ohio,” Moody’s added in the release.

The agency said the positive outlook for Duke Ohio's ratings reflects its view of a credit supportive regulatory environment and an expectation that the utility will continue to demonstrate strong financial metrics.

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