Fitch lifts Dominion Resources

Fitch Ratings said it upgraded the rating on Dominion Resources, Inc.'s remarketable junior subordinated notes due July 1, 2019 to BBB from BBB-.

The upgrade was prompted by the removal of the interest deferral feature in connection with the remarketing of the notes, Fitch said.

Based on the agency’s criteria, junior subordinated debt is typically rated one notch below the company’s issuer default rating while those with an interest deferral feature are considered more equity like and rated two notches below the issuer default rating, Fitch said.

The proceeds will be used to settle the holders forward purchase obligation and ultimately used by the company to repay debt issued to fund capital expenditures or for other corporate purposes, the agency said.

The company’s business risk and financial profile are anchored in Virginia Electric and Power Co., a large integrated electric utility based in Virginia that represents about two thirds of consolidated earnings and cash flows, Fitch said.

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