OREANDA-NEWS. Fitch Ratings expects to assign the following ratings and Outlooks to the Duke Energy Florida Project Finance, LLC:

--Series A 2018 $178,800,000 'AAAsf'; Outlook Stable;

--Series A 2021 $153,000,000 'AAAsf'; Outlook Stable;

--Series A 2026 $444,800,000 'AAAsf'; Outlook Stable;

--Series A 2033 $517,600,000 'AAAsf'; Outlook Stable.

Security for the bonds will be the nuclear asset-recovery property, which includes the irrevocable right to impose, bill and collect the nuclear asset-recovery charges (NARCs) from all customers of DEF's service territory in Florida.

Details regarding the NARC bonds, as well as Fitch's stress and rating sensitivity analysis, are discussed in the presale report titled 'Duke Energy Florida Project Finance, LLC', dated June 8, 2016, which is available on Fitch's web site. The presale report details how Fitch addresses the key rating drivers which are summarized below.

KEY RATING DRIVERS

Statutory and Regulatory Framework: The strength and stability of the underlying NARCs are established by the financing order issued by the Florida Public Service Commission. The financing order establishes the irrevocable, binding, and nonbypassable NARCs and defines bondholders' property rights in the nuclear asset-recovery property. The financing order contains the key elements important in a utility tariff securitization.

Adequate Credit Enhancement via True-Ups: Mandatory semi-annual true-up filings adjust NARCs to ensure collections are sufficient to provide all scheduled payments of principal and interest, pay fees and expenses and replenish the capital subaccount (0.50%). Furthermore, quarterly and interim true ups may occur if necessary but must meet certain defined parameters.

Supports 'AAAsf' Stresses: Demand shifts in consumption can be caused by various factors, such as the introduction of new technologies, general economy, impacts from natural disasters, demographic changes or shifting usage patterns, which present risk in this asset class, given the longer tenor of the nuclear asset-recovery bonds.

Fitch's 'AAAsf' scenario analysis stresses key model variables, such as consumption variance, chargeoff rates and delinquencies, to address this risk. Under Fitch's 'AAAsf' stress assumptions, the peak NARC for the Series A bonds is 8.01 (cents/kWh), or 7.42% of the residential customer bill, which is consistent for 'AAAsf' ratings.

Sound Legal Structure: Fitch reviews all associated legal opinions furnished to analyze the integrity of the legal structure.