Fitch applies BBB+ to Duke Energy notes

Fitch Ratings said it assigned a BBB+ rating to Duke Energy Corp.'s dual tranche offering of nine- and 30-year senior notes.

The new ratings are on Rating Watch Negative. Fitch placed Duke Energy’s ratings on Rating Watch Negative Oct. 29 following the announcement of a definitive agreement to acquire Piedmont Natural Gas Co., Inc.

A portion of the proceeds will be used to repay outstanding commercial paper, repay at maturity $300 million of Progress Energy Inc.'s senior notes due Jan. 15, 2016, and for general corporate purposes.

The Rating Watch Negative reflects the rise in leverage from Duke Energy’s pending $4.9 billion acquisition of Piedmont Natural Gas Co., Inc. The higher leverage is driven by the acquisition financing plan, which includes a large debt component of up to $4.3 billion that increases consolidated debt leverage compared with Fitch's previous base case, which assumed debt to EBITDAR would fall below 4.5 times.

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