S&P: Duke Energy notes BBB+

S&P said it assigned a BBB+ senior unsecured debt rating to Duke Energy Corp.'s $3.75 billion of senior notes issued in three series with maturities ranging from five- to 30-years, The securities are $750 million 1.8% senior notes due 2021, $1.5 billion 2.65% senior notes due 2026 and $1.5 billion 3.75% senior notes due 2046.

The proceeds will be used to finance a portion of the costs in connection with the acquisition of Piedmont Natural Gas Co. Inc.

The ratings reflect the company’s excellent business and significant financial risk profiles, S&P said.

Although the agency said it views the acquisition as marginally favorable because it will strengthen Duke's business risk profile, the proposed financing weakens Duke's financial profile.

After the acquisition closes, Duke Energy's financial profile will weaken, but its debt-to-EBITDA ratio will remain consistently above 5x, S&P said.

Duke also is planning to divest its Latin American merchant generation assets, which could further moderate business risk and help the company reduce holding company debt.

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