Fitch: DTE Electric bonds A

Fitch Ratings said it assigned an A rating to DTE Electric Co.'s issuance of $400 million 3.65% general and refunding mortgage bonds due March 15, 2024.

The mortgage bonds are senior secured debt obligations of DTE Electric and rank pari passu with other senior secured debt, Fitch said.

The proceeds primarily will be used to redeem $250 million of 6.4% secured bonds due Oct. 1 and to reduce short-term borrowings, the agency said.

The outlook is stable.

The ratings reflect the company's relatively predictable earnings and cash flows, solid credit metrics, constructive state regulatory environment in Michigan and the strong operating profile of its generating assets, Fitch said.

The company also benefits from a sufficient liquidity position, manageable debt maturities and an improving Michigan economy, the agency said.

Credit concerns include a still weak service-area economy with above-average unemployment in the Detroit area, Fitch said, and the future effects of more stringent environmental regulations on DTE's predominantly coal-fired power generation portfolio.

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