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Fitch Rates PPL Energy Supply Commercial Paper Program 'F2'.

NEW YORK -- Fitch Ratings has assigned an 'F2' rating to PPL Energy Supply LLC's (PPLES) $500 million 4(2) commercial paper (CP) program.

The 'F2' CP rating is consistent with PPLES's 'BBB' Issuer Default Rating (IDR). In support of CP borrowings and other working capital needs PPLES has an aggregate of $4 billion of bank credit facilities that are well in excess of the CP program.

Debt maturities are well laddered with $500 million due in November 2011 and $300 million in each of the years 2013 and 2014. There are no debt maturities in 2012.

Credit quality measures are consistent with Fitch's guidelines for companies with similar risk profiles. For the 12-months ended June 30, 2011, debt/EBITDA was below 2.0 times (x) and EBITDA/interest in excess of 6.0x.

Going forward, credit measures are expected to trend downward, but remain supportive of current ratings. The downtrend reflects the impact of the roll-off of above market hedges and Fitch's expectations of a low power price environment for the next few years.

In January 2011, PPLES distributed its interests in PPL Global to its direct parent PPL Energy Funding. The internal transfer enhanced reported credit metrics, but had no affect on PPLES's ratings or credit quality since Fitch considered PPL Global's business to be non-recourse to PPLES. PPL Global owns electric distribution businesses in the UK that carry more leverage than is typical for merchant generation business.

Additional information is available at 'www.fitchratings.com'. The ratings above were solicited by, or on behalf of, the issuer, and therefore, Fitch has been compensated for the provision of the ratings.

Applicable Criteria and Related Research:

--'Corporate Rating Methodology' (Aug. 12, 2011);

-- 'Recovery Ratings and Notching Criteria for Utilities' (May 12, 2011);

--'Short-Term Ratings Criteria for Non-Financial Corporates' (Aug. 12, 2011).

Applicable Criteria and Related Research:

Corporate Rating Methodology

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=647229

Recovery Ratings and Notching Criteria for Utilities

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=648449

Short-Term Ratings Criteria for Non-Financial Corporate

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=647249

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE.
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Comment:Fitch Rates PPL Energy Supply Commercial Paper Program 'F2'.
Publication:Business Wire
Geographic Code:1U2NY
Date:Oct 11, 2011
Words:543
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