Fitch affirms DTE

Fitch Ratings said it affirmed the BBB issuer default ratings of DTE Energy Co. and its electric utility operating subsidiary Detroit Edison Co. and the BBB- issuer default rating of DTE's gas utility subsidiary Michigan Consolidated Gas Co.

Fitch also affirmed the companies' F2 short-term issuer default and commercial paper ratings, DTE's BBB senior unsecured debt, Detroit Edison's A- senior secured debt and Michigan's BBB+ senior secured debt.

Fitch said the outlook of Detroit Edison was revised to positive from stable, while the outlooks for DTE and Michigan remain stable.

Fitch downgraded Detroit Edison's preferred stock rating to BB+ from BBB, reflecting a January policy change in Fitch's notching criteria for hybrid securities, the agency said.

The affirmation reflects the stable cash flow and strong credit attributes of DTE's two low-risk utility subsidiaries as well as the expectation of continued improvement in the company's credit protection measures as a result of regulatory policies in Michigan that are supportive of credit quality, Fitch said.

The ratings also consider the relatively large parent-level debt balance; cyclical cash flow of DTE's non-regulated businesses, which are directly affected by macroeconomic factors; and the inherent risks in operating a commodity trading business along with the uncertain impact on the commodity trading business of the Dodd-Frank Act, the agency said.

The debt-to-EBITDA ratio for the 12 months ended Sept. 30 was 3.24 times.

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