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Moody's Changes PPL Outlook To Negative

The Associated Press

NEW YORK (AP) — Moody's Investors Service on Monday revised the outlook of PPL Corp., its subsidiary PPL Electric Utilities Corp. and its affiliate PPL Capital Funding Inc. to negative from stable.

The ratings of subsidiary PPL Energy Supply LLC was affirmed and the outlook remains stable.

The negative outlook for Allentown, Pa.-based PPL Electric reflects Moody's expectation that starting next year, as PPL Electric implements market rates for generation and begins to spend heavily in support of its distribution and transmission infrastructure, its financial metrics will deteriorate significantly.

Moody's said the resulting metrics will remain below peers for the foreseeable future.

The ratings agency detailed concerns regarding revenue and cash flow in coming years because of regulatory issues and rate changes, combined with expectations for significantly increased capital spending. Moody's is also concerned about the potential for increasing debt.

In afternoon trading, PPL shares added 19 cents to $32.77.