S&P lowers Duke Energy ratings

Standard & Poor's said it lowered its corporate credit ratings on Duke Energy Corp. and its subsidiaries, Duke Capital Corp., PanEnergy Corp., Texas Eastern Transmission LP, Westcoast Energy Inc., and Union Gas Ltd. to BBB from BBB+. The A-2 short-term corporate credit and commercial paper ratings were affirmed.

The outlook is stable.

S&P said it also affirmed its BBB- corporate credit rating on Duke Energy Trading & Marketing LLC. The outlook on the Duke Energy Trading & Marketing rating is negative.

"The downgrade reflects weaker-than-anticipated financial performance during 2003 and an ambitious deleveraging plan that could materially improve the consolidated financial profile, but which carries a measure of execution risk," said S&P credit analyst Dimitri Nikas.

Furthermore, S&P said that the Duke Energy's continuation of trading and marketing activities around the merchant generation assets means that the company will continue to be exposed to market risk and needs to dedicate material liquidity to support these activities, preserving the element of risk in the company's business profile, despite the company's recent pullback.

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