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S&P upgrades DTE Energy utilities on financial autonomy

S&P Global Ratings has upgraded the long-term issuer credit rating and issue-level rating of DTE Electric Co. and DTE Gas Co. to 'A-' from 'BBB+' with stable outlook.

The rating agency also affirmed issue-level ratings on both DTE Energy Co. utilities' senior secured debt at 'A' and removed them from under criteria observation. The 'A-2' commercial paper ratings remain unchanged.

The upgrade to the credit ratings of the utilities is a result of S&P Ratings' revised Group Rating Methodology, under which the rating agency has established that "both DTE Electric and DTE Gas are well insulated from their parent DTE Energy" and "any significant credit stress at DTE Energy would have a minimally adverse effect on the creditworthiness of the subsidiaries," according to an Aug. 28 rating action.

The stable outlook on DTE Electric reflects that it will generate sufficient cash flow to maintain adjusted funds from operations-to-debt ratio of 19%-21% over the next two years. DTE Gas, meanwhile, will maintain an FFO-to-debt ratio of 14%-16% through 2021.

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.