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Fitch cuts PPL Energy debt to BBB
Fitch Ratings said it lowered the senior unsecured debt ratings of PPL Energy Supply, LLC to BBB from BBB+ and affirmed the other ratings of PPL Corp. and its domestic subsidiaries.
The outlook is stable.
The agency said the downgrade aligns the rating with the BBB issuer default rating in a manner that is consistent with the approach Fitch applies to other competitive generators and also recognizes a lower valuation of PPL Energy's power assets based on current and forward wholesale power prices.
The rating also reflect Fitch's expectation of lower-than-previously expected earnings and cash flow improvement in 2010 and 2011. The agency said that based on recent hedge transactions entered into by PPL Energy for 2010 and 2011, Fitch no longer expects leverage and cash flow measures, which weakened in 2008 and through the first half of 2009, to reach the levels required to support the former rating.
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