The ratings on FPL Group Inc. (FPL) and its subsidiaries are on CreditWatch with negative implications because of the announced merger with Constellation Energy Group Inc. The combination would most likely increase FPL's satisfactory business risk profile of '5' (business risk profiles are categorized from '1' (excellent) to '10' (vulnerable)) and weaken its financial profile based on the assumption that the combined entity would have a significantly higher percentage of cash flow from higher-risk competitive businesses with little change in the pro forma balance sheet. Despite the slightly higher risk profile, the combined company should benefit from additional regulatory diversity and an increased asset base for the competitive energy operations. FPL's consolidated rating currently reflects the strength of the regulated
