Fitch: PPL Electric bonds A-

Fitch Ratings said it assigned an A- rating to PPL Electric Utilities Corp.'s new $400 million of 3% first mortgage bonds due 2021.

The outlook is stable.

Proceeds will be used to repay short-term borrowings and intercompany loans and replenish corporate cash used to redeem $400 million of secured bonds on July 26.

PPL's ratings are supported by leverage, interest coverage and cash flow measures that are consistent with Fitch's target financial ratios for those issuers rated with a BBB issuer default rating and comparable to its peer group of electric distribution utilities with similar risk characteristics, the agency said.

PPL's creditworthiness also benefits from the absence of commodity price exposure, the agency added. In 2011, cash flow continues to benefit from a $77.5 million base rate increase implemented in January.

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