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S&P shifts outlook on Duke Energy, subsidiaries to negative

S&P Global Ratings on May 20 revised its outlook on Duke Energy Corp. and its subsidiaries to negative from stable on expectations of weaker financial measures.

The ratings agency said its outlook change considered potential higher coal ash costs and regulatory lag in North Carolina, as well as delays to the Atlantic Coast Pipeline project, of which the company owns a 47% interest.

"Specifically, we expect delays and increased costs for the company's ACP project (now expected to cost between $7 billion and $7.8 billion) to weaken credit metrics," S&P Global Ratings added.

Beginning in 2020, S&P Global Ratings said it no longer expects Duke's ratio of funds from operations to debt to be greater than 15%. Ratings lowered its stand-alone credit profile for Duke Energy Carolinas LLC to "a" from "a+" to reflect weaker financial measures.

The rating agency noted that it could lower Duke's ratings by one notch over the next 12 to 24 months if there is no consistent improvement in the company's financial measures.

This S&P Global Market Intelligence news article may contain information about credit ratings issued by S&P Global Ratings. Descriptions in this news article were not prepared by S&P Global Ratings.