S&P upgrades DPL

S&P said it raised the issuer credit ratings on DPL Inc. and Dayton Power & Light Co. (DP&L) to BB from BB- and placed the ratings on CreditWatch with positive implications.

The agency also raised the rating on DPL's senior unsecured debt to BB from BB- and the rating on DP&L's senior secured debt to BBB from BBB- and placed the ratings on CreditWatch with positive implications.

The 1+ recovery rating on DP&L's senior secured debt is unchanged. In addition, the 4 recovery rating on DPL's senior unsecured debt is unchanged, indicating an expectation for average (30%-50%; rounded estimate: 30%) recovery in the event of a payment default.

S&P said the upgrade follows DPL's announcement that it has reached an agreement to sell its merchant generation and related assets, including Tait, Montpelier, Yankee, Hutchings, Monument and Sidney generating stations, totaling about 973 megawatts of merchant generation.

The agency said the transaction raises its confidence that the company will accomplish its transformation to a low-risk transmission and distribution utility.

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