Fitch rates Duke notes BBB+

Fitch Ratings said it assigned a BBB+ rating to Duke Energy Corp.'s new $700 million of 1.625% notes due 2017 and $500 million of 3.05% senior notes due 2022. The outlook is stable.

The proceeds will be used to repay Duke Energy Ohio Inc.'s $500 million of 5.7% debentures at maturity on Sept. 15, 2012 and for general corporate purposes.

The agency said the ratings are supported by the credit strength and cash flow diversity of Duke Energy's six regulated utility subsidiaries operating in six states as well as the company's increased scale and enhanced financial flexibility following the merger with Progress Energy Corp.

Rating concerns include the increase in the proportion of debt at the parent level due to the acquisition of the more levered Progress Energy, the agency said, and Duke Energy is at risk for system fuel savings included as part of the merger settlement agreement with the North Carolina Public Service Commission. The companies agreed to guarantee $650 million of system fuel savings for Carolina retail customers over the next five years.

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