DTE Energy Co.

The stable outlook reflects our view that the midstream business spin-off strengthens DTE's business risk profile by reducing risk and focusing the company's growth on its lower-risk regulated utility strategy. On a pro forma basis, we expect the utility businesses will account for about 90% of the consolidated company. We expect DTE's financial measures will generally remain in line with expectations, with funds from operations (FFO) to debt of about 16%. We could lower our rating on DTE if: Its core financial measures consistently underperform our base-case forecast; Financial measures remain consistently less credit-supportive, including adjusted FFO to total debt of less than 13%; and DTE's business risk increases materially because of weaker regulatory support. We could raise our rating

...DTE Energy Co. benefits from its vertically integrated electric and gas distribution operations. Following the completion of the midstream business spin-off, DTE will focus on improving its regulated utility business without disproportionately expanding its other businesses. The company's effective management of regulatory risk and the favorable Michigan regulatory framework support its credit quality. We expect DTE to benefit from the cost-recovery mechanisms allowed under the favorable Michigan regulatory framework....

Full Report