Fitch Affirms Ratings of FPL Group and Subsidiaries; Outlook Stable

NEW YORK--(Business Wire)--
Fitch Ratings has affirmed the ratings of FPL Group, Inc. (FPL), FPL Group
Capital, Inc. (Group Capital) and Florida Power & Light Company (FP&L),
following a regular credit review. The Rating Outlook for all three entities is
Stable. The rating affirmations affect approximately $12.6 billion of
securities. A complete list of ratings is set forth below.

FPL's Issuer Default Rating (IDR) of 'A' is based upon the combined sources of
cash flow available to the group from FP&L, a large and robust electric utility,
and from a profitable business as a developer and owner/operator of generation
assets through indirect subsidiary NextEra. Group Capital is an intermediate
holding company that owns NextEra and also a financing vehicle that issues debt
to fund activities of NextEra and other subsidiaries. Group Capital's ratings
reflect the unconditional and irrevocable guarantee by FPL of the debt
obligations of Group Capital, and thus they carry the same ratings as FPL. FP&L
(IDR affirmed at 'A') has been the core or anchor of the consolidated group, but
growth of NextEra accelerated over the past five years. NextEra's share of FPL
net income is estimated at approximately half of consolidated 2008 and 2009 net
income, up from roughly 20% in 2004.

The rating affirmations and Stable Outlook of FPL and Group Capital are based on
Fitch's assumption that FPL will continue to fund its utility and non-utility
capital expenditures with a balanced capital mix and will maintain its
investment focus on relatively low-risk assets with long-term power purchase
arrangements. Longer term, NextEra's nuclear and renewable assets are favorably
positioned to benefit if the U.S. implements limits on carbon emissions and
renewable portfolio standards, developments that would benefit FPL more than it
would competing generation companies. The Stable Outlook also assumes that the
outcome of FP&L's pending electric base rate case (filed early in 2009; a final
order is expected on Jan. 29, 2010) will be balanced. Due to the debt leverage
borne at FPL Group, the group's consolidated credit measures are vulnerable to
erosion if the FP&L base rate order were more adverse than our current
expectation.

The affirmation of FP&L's IDR of 'A' reflects the integrated electric utility's
low debt leverage and strong financial profile and large service territory. It
also reflects Florida Public Service Commission (FPSC) policies and procedures
that permit timely recovery of volatile cost components such as fuel and
purchased power and storm-related expenses via tracker clauses which tend to
stabilize cash flow. Over the past two years, FP&L's sales and customer counts
declined, reflecting a severe real estate downturn and recession in South
Florida. However, the short-term cash flow impact of that trend has largely been
offset by the sharp reduction in natural gas costs and expense recovery under
tracker clauses.

Fitch's Rating Outlook for FP&L is Stable despite heavy capital expenditure
commitments and the pending base rate case, reflecting the utility's sound
financial foundation and strong credit ratios. Fitch's Outlook assumes that
FP&L's contentious and politicized pending base rate proceedings will have a
balanced outcome despite the recent turbulent regulatory environment in Florida.
The Stable Outlook also assumes that the FPSC will maintain existing tracker
mechanisms that provide periodic reset for recovery of many expense categories.

Growing investment in NextEra has been funded with a mix of equity, non-recourse
project finance debt, and corporate debt and hybrid securities of Group Capital
in order to provide financial flexibility. Risks associated with increasing
investment in wind and solar generation are mitigated by NextEra's experience in
site and equipment selection, its ability to secure contracts with strong
counterparties, the size and scale of a portfolio of assets in diverse
locations, non-recourse financing, and available tax incentives. Over 56% of
NextEra's independent power production is from nuclear, hydroelectric, wind or
solar, all of which are favorably positioned in the event of future greenhouse
gas regulations, and nearly 95% is from the above fuels plus natural gas.
NextEra's generation business produces significant cash flow and derives a high
percentage of its revenues under term contracts with creditworthy
counterparties.

FPL's cash flow and profitability are enhanced as a result of the consolidated
tax position of NextEra and FP&L. Other sources of financial strength for the
group include a low dividend payout ratio that permits retention of equity;
strong access to the equity and debt capital markets; ample liquidity back-up
under revolving credits that extend until April 2013; and a fully funded pension
plan. The favorable environmental characteristics of the power production
facilities of NextEra and FP&L enhance the group's long-term asset values.

If any of the following were to occur, it could have negative credit
implications for FPL and Group Capital:

--Aggressive development of power projects without assured off-take
arrangements;

--High capital investment without balanced capital funding;

--Continuing increase in the proportion of corporate cash flow derived from
NextEra;

--Adverse changes in tax laws or regulations;

--Unfavorable regulatory outcome affecting FP&L that reduces cash flows
available to support consolidated credit measures.

Credit concerns for FP&L include recent political and regulatory turmoil
affecting the pending base rate case combined with very high capital
expenditures.

Fitch affirms the following ratings with a Stable Outlook:

FPL Group, Inc.

--IDR at 'A'.

FPL Group Capital, Inc.

--IDR at 'A';

--Short-term IDR at 'F1';

--Commercial paper (CP) at 'F1';

--Senior unsecured debentures at 'A';

--Equity units at 'A';

--Jr. subordinate hybrids at 'A-'.

FPL Group Capital Trust I

--Trust preferred stock at 'A-'.

Florida Power & Light Company

--IDR at 'A';

--Short-term IDR at 'F1'

--CP at 'F1';

--First mortgage bonds at 'AA-'.

Additional information is available at www.fitchratings.com.

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PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK:
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PUBLIC WEBSITE WWW.FITCHRATINGS.COM. PUBLISHED RATINGS, CRITERIA AND
METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF
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Fitch Ratings, New York
Ellen Lapson, CFA, +1-212-908-0504
Sharon Bonelli, +1-212-908-0581
Cindy Stoller, +1-212-908-0526
cindy.stoller@fitchratings.com

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