Moody's changes outlook of Duke Energy, Progress Energy to negative

Moody's Investors Service said it affirmed the ratings of Duke Energy Corp. (A3), Progress Energy, Inc. (Baa1) and Duke Energy Progress, Inc. (A1) and changed their outlooks to negative from stable.

"The negative outlook on Duke's rating reflects consolidated financial metrics that are weak for its current A3 rating and likely to decline slightly over the next few years, persistently high levels of debt at the holding company level, future financing needs for pipeline and other parent company investments and challenges at some of its international businesses, which the company has decided to retain," Michael Haggarty, associate managing director, said in an agency news release.

The agency said the negative outlook on Duke also considers the negative outlook on one of its two largest utility subsidiaries, Duke Energy Progress, which reflects financial coverage metrics that Moody’s expects to decline materially due to increased O&M expenses and as a result of higher debt incurred for coal ash basin remediation and other capital expenditures.

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