Research Update: Duke Energy Corp. Ratings Affirmed; Outlook Remains Stable

Duke Energy Corp. recently issued about $1.6 billion of common equity on a forward sale agreement that settles on or before year-end 2018, consistent with its stated strategy to issue about $2 billion of common equity during 2018. The company also received a rate order in North Carolina for Duke Energy Progress LLC that approved its recovery of deferred coal ash costs. We are affirming our ratings on Duke Energy, including the 'A-' issuer credit rating on the company. The outlook remains stable. The stable outlook incorporates our expectations for modestly weaker financial measures in 2018 and 2019 that subsequently improve in 2020, consistently resulting in funds from operations (FFO) to debt of greater than 15%. We assess the company

...+ Duke Energy Corp. recently issued about $1.6 billion of common equity on a forward sale agreement that settles on or before year-end 2018, consistent with its stated strategy to issue about $2 billion of common equity during 2018. The company also received a rate order in North Carolina for Duke Energy Progress LLC that approved its recovery of deferred coal ash costs. + We are affirming our ratings on Duke Energy, including the 'A-' issuer credit rating on the company. The outlook remains stable. + The stable outlook incorporates our expectations for modestly weaker financial measures in 2018 and 2019 that subsequently improve in 2020, consistently resulting in funds from operations (FFO) to debt of greater than 15%. We assess the company as having minimal cushion at its current rating level and believe the management team must continue to effectively execute on its strategic plans to maintain the current rating....

Research Update