Standard & Poor’s today affirmed the ratings of Duke EnergyCorp. and related entities and assigned a negative rating outlook.

Long-term ratings were removed from CreditWatch, where they hadbeen placed with negative implications on Aug. 4. Ratings of DukeEnergy Trading and Marketing LLC, however, remain on CreditWatchwith positive implications pending the merger of Mobil Corp. andExxon Corp.

The outlook reflects Duke Energy’s growing business riskexposure, resulting from the company’s aggressive expansion intononregulated global merchant energy businesses, which raises thefinancial targets the company must achieve in order to maintain theexisting rating.

Implementation of Duke’s merchant energy strategy is expected todrive the level of investment in higher risk, nonregulatedbusinesses to about 50% (as measured by assets and earnings beforeinterest and taxes) of the consolidated company within five years.Standard & Poor’s anticipates that Duke’s continued significantcapital investments, which will enable the company to establish asufficient operating platform in capital-intensive businesses, willbe financed in a manner commensurate with the rating.

In a related development Duke Energy announced late yesterday itis preparing to issue $1 billion of global senior notes through itssubsidiary Duke Capital Corp., marking the first time the companyhas issued global notes. “We will be issuing these notes to fundgrowth in the company’s unregulated businesses,” said DavidHauser, senior vice president and treasurer of Duke Energy. “DukeCapital management will meet with global investors in Europe andthe United States during the next week in preparation for thesale.”

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