Fitch lowers Exelon, lifts Baltimore Gas

Fitch Ratings said Exelon Corp.’s issuer default ratings remain on Rating Watch negative.

The agency also said it downgraded Exelon Generation Co., LLC’s issuer default rating and senior unsecured debt ratings to BBB from BBB+. Its outlook was revised to stable from negative.

Fitch also upgraded Baltimore Gas and Electric Co.’s issuer default rating to BBB+ from BBB and revised its outlook to stable from positive.

Commonwealth Edison Co.’s issuer default rating was affirmed at BBB and its outlook was revised to positive from stable.

PECO Energy Co.’s issuer default rating was affirmed at BBB+ with a stable outlook.

The Rating Watch negative on Exelon reflects the increased leverage that results from its pending acquisition of Pepco Holdings, Inc., Fitch said.

The higher leverage reflects the acquisition financing plan and the consolidation of the more levered Pepco, the agency said.

The rise in leverage is mitigated partly by an increase in regulated earnings, Fitch said.

The downgrade of Exelon Generation reflects the inherent cash-flow volatility of the commodity-sensitive competitive generation business, the agency said.

The ratings also consider the ongoing weakness in forward power and natural-gas prices, soft power demand and aggressive competition in the retail-supply business, Fitch said.

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