S&P puts Constellation on positive watch

Standard & Poor's said it affirmed the BBB corporate credit rating on Exelon Corp. and the corporate credit ratings on its subsidiaries Commonwealth Edison Co., PECO Energy Co. and Exelon Generation Co. LLC.

The outlooks are stable.

S&P placed the corporate credit ratings on Constellation Energy Group Inc. on CreditWatch with positive implications and affirmed the ratings on Baltimore Gas & Electric Co., a subsidiary of Constellation, at BBB+. The outlook is stable.

The rating actions follow Exelon's announcement that it has agreed to merge with Constellation in a stock-for-stock transaction, the agency said.

Exelon expects to use net proceeds from the divestiture of about 2,650 megawatts of generation assets to offset future incremental debt funding as well as to fund growth projects, the agency added. The transaction will require the approval of the Federal Energy Regulatory Commission, the Nuclear Regulatory Commission, the Department of Justice and the regulatory commissions of Maryland, New York, and Texas.

The ratings consider the company's demonstrated willingness to walk away from acquisitions when concessions imperiled the ratings of the merged entity, the agency added.

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