Moody's downgrades Progress Energy Florida

Moody's Investors Service said it downgraded Progress Energy Florida, Inc.'s senior secured debt rating to A2 from A1, issuer and senior unsecured debt ratings to Baa1 from A3 and preferred stock rating to Baa3 from Baa2 and affirmed its Prime-2 commercial paper rating.

The agency affirmed Progress Energy, Inc.'s Baa2 senior unsecured debt rating and Prime-2 commercial paper rating, Florida Progress Funding Corp.'s Baa2 junior subordinated debt rating, FPC Capital 1's Baa2 preferred stock rating and Progress Energy Carolina's A1 senior secured debt rating, A3 issuer and senior unsecured debt ratings, Baa2 preferred stock and Prime-2 commercial paper rating.

This concludes the review for downgrade of the ratings of Progress Energy and Progress Energy Florida begun on Jan. 19, and the outlook is stable.

The agency said the downgrade reflects the recent decline in the political and regulatory environment for investor-owned utilities in Florida and continued challenging economic conditions in Progress Energy Florida's service territory, resulting in lower growth rates and lower customer usage than historically.

The confirmation of the ratings of parent company Progress Energy considers the consolidated organization's completely regulated businesses, its low risk profile and the diversity provided by its two regulated utility subsidiaries, Moody's said.

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