Duke Energy Progress Securitization Arm Details Governance, Legal Risks

TL;DR

**This 10-K is a governance and legal update for a specialized securitization vehicle, not a financial report, so don't expect revenue or profit numbers; focus on the third-party legal risks.**

AI Summary

Duke Energy Progress NC Storm Funding II LLC (DEPNCSFII), a bankruptcy-remote subsidiary of Duke Energy Progress, LLC, filed its 10-K for the fiscal year ended December 31, 2025. This filing primarily details corporate governance, executive appointments, and legal proceedings involving a key third-party, U.S. Bank National Association. Nicholas J. Giaimo was appointed President, CFO, and Treasurer of DEPNCSFII in January 2026, while Abigail L. Motsinger became Manager and Controller in March 2026. The company reported no direct compensation to its managers or executive officers, except for an annual independent manager fee of $2,000 paid to Global Securitization Services, LLC. The filing notably omits financial statements and risk factors, as permitted by General Instruction J of Form 10-K, indicating its specialized role in securitization. A significant legal risk involves U.S. Bank National Association, which is contesting a lawsuit, The National Collegiate Student Loan Master Trust I, et al. v. U.S. Bank National Association, et al., C.A. No. 2018-0167-JRS (Del. Ch.), concerning its roles as indenture trustee and successor special servicer for student loan-backed securities, though U.S. Bank denies liability. The strategic outlook for DEPNCSFII remains focused on its securitization structure, supported by its parent company, Duke Energy Progress, LLC, which acts as depositor, sponsor, and servicer.

Why It Matters

This 10-K provides crucial insight into the operational structure and governance of Duke Energy Progress NC Storm Funding II LLC, a specialized entity designed for securitization. For investors, understanding the roles of key personnel like Nicholas J. Giaimo and Abigail L. Motsinger, and the limited compensation structure, clarifies the company's lean operational model. The ongoing legal dispute involving U.S. Bank National Association, while not directly against DEPNCSFII, highlights potential third-party risks in the broader securitization market that could indirectly impact similar structures. This filing underscores the importance of robust third-party oversight in complex financial instruments, setting a competitive context for other utilities utilizing securitization for storm recovery funding.

Risk Assessment

Risk Level: medium — The risk level is medium due to the significant legal proceedings involving U.S. Bank National Association, a key third-party in DEPNCSFII's securitization structure. The lawsuit, The National Collegiate Student Loan Master Trust I, et al. v. U.S. Bank National Association, et al., C.A. No. 2018-0167-JRS (Del. Ch.), alleges misconduct concerning trust administration and special servicing, which could set precedents or create reputational risks for similar securitization entities, even though U.S. Bank denies liability and is contesting the claims vigorously.

Analyst Insight

Investors should recognize that this 10-K is primarily a governance and legal disclosure for a securitization vehicle, not a traditional operating company. Focus on the stability of the management team and monitor the legal proceedings involving U.S. Bank National Association, as adverse outcomes could impact the broader securitization market and indirectly affect DEPNCSFII's operational environment.

Financial Highlights

debt To Equity

N/A

revenue

N/A

operating Margin

N/A

total Assets

N/A

total Debt

N/A

net Income

N/A

eps

N/A

gross Margin

N/A

cash Position

N/A

revenue Growth

N/A

Executive Compensation

Key Numbers

• $2,000 — Annual independent manager fee (Paid to Global Securitization Services, LLC by DEPNCSFII)
• 2025-12-31 — Fiscal year end (Reporting period for the 10-K filing)
• 2026-03-26 — Filing date (Date the 10-K was filed with the SEC)
• 2018-03-09 — Lawsuit filing date (Date The National Collegiate Student Loan Master Trust I, et al. v. U.S. Bank National Association, et al. was filed)

Key Players & Entities

• Duke Energy Progress NC Storm Funding II LLC (company) — registrant and wholly owned subsidiary
• Duke Energy Progress, LLC (company) — depositor, sponsor, servicer, and parent company
• Nicholas J. Giaimo (person) — President, Chief Financial Officer and Treasurer of DEPNCSFII since January 2026
• Abigail L. Motsinger (person) — Manager and Controller of DEPNCSFII since March 2026
• Bernard J. Angelo (person) — Independent Manager of DEPNCSFII since July 2025
• U.S. Bank National Association (company) — Securities Intermediary, Account Bank, and defendant in a significant lawsuit
• Global Securitization Services, LLC (company) — recipient of annual independent manager fee
• Deloitte & Touche LLP (company) — auditor for Duke Energy Progress, LLC
• Ernst and Young LLP (company) — auditor for U.S. Bank Trust Company, National Association
• Duke Energy Corporation (company) — indirect parent company of DEPNCSFII

FAQ

Risk Factors

• Litigation involving U.S. Bank National Association [medium — legal]: DEPNCSFII is indirectly exposed to legal risks through its parent company's relationship with U.S. Bank National Association. U.S. Bank is contesting a lawsuit, The National Collegiate Student Loan Master Trust I, et al. v. U.S. Bank National Association, et al., C.A. No. 2018-0167-JRS (Del. Ch.), concerning its roles as indenture trustee and successor special servicer for student loan-backed securities. U.S. Bank denies liability.

Industry Context

DEPNCSFII operates within the specialized financial services sector focused on securitization, particularly for utility storm recovery costs. This niche allows utility companies to finance significant, infrequent expenses by issuing bonds backed by future customer charges. The industry is characterized by regulatory oversight and the need for robust legal and financial structuring to ensure bankruptcy remoteness and investor confidence.

Regulatory Implications

As a bankruptcy-remote special purpose entity, DEPNCSFII is subject to specific regulatory frameworks governing securitization and financial instruments. The omission of financial statements and risk factors, permitted under General Instruction J, indicates its specialized reporting requirements. Any changes in regulations impacting securitization or the treatment of storm recovery costs could directly affect DEPNCSFII's operations and the parent company's financing strategies.

What Investors Should Do

1. Monitor legal proceedings involving U.S. Bank National Association.
2. Review parent company filings for financial performance and strategy.
3. Assess the impact of potential regulatory changes on securitization structures.

Key Dates

• 2025-12-31: Fiscal year end — Marks the end of the reporting period for the 10-K filing.
• 2026-01-01: Nicholas J. Giaimo appointed President, CFO, and Treasurer — Key executive appointment impacting the financial and operational leadership of DEPNCSFII.
• 2026-03-26: Abigail L. Motsinger appointed Manager and Controller — Key executive appointment impacting the accounting and managerial oversight of DEPNCSFII.
• 2026-03-26: 10-K Filing Date — The date the annual report was officially submitted to the SEC.
• 2018-03-09: Lawsuit filing date — Initiation date of the legal proceeding involving U.S. Bank National Association, a key third-party.
• 2025-07-01: Bernard J. Angelo assumed role as Independent Manager — Appointment of an independent manager overseeing DEPNCSFII's operations.

Glossary

Bankruptcy-remote subsidiary

A legal entity structured to isolate its assets and liabilities from its parent company, protecting it from the parent's bankruptcy. (This structure is critical for DEPNCSFII's role in securitization, ensuring the isolation of storm bond assets.)

Securitization

The process of pooling various types of contractual debt (like mortgages, auto loans, or storm bonds) and selling these pools to third-party investors as securities. (DEPNCSFII's primary function is to facilitate securitization of storm-related costs for Duke Energy Progress, LLC.)

Indenture trustee

A financial institution appointed to represent the interests of bondholders in a debt issuance, ensuring the issuer complies with the terms of the indenture agreement. (This role is relevant due to the lawsuit involving U.S. Bank National Association as an indenture trustee for student loan-backed securities.)

Depositor, Sponsor, Servicer

In securitization, the depositor transfers assets into the trust, the sponsor structures the transaction, and the servicer manages the underlying assets and collects payments. (Duke Energy Progress, LLC holds these key roles for DEPNCSFII, highlighting the parent company's integral involvement.)

Year-Over-Year Comparison

This filing represents the first 10-K for DEPNCSFII, as indicated by the omission of comparative financial data and the focus on initial corporate governance and executive appointments. Key dates such as the fiscal year end of December 31, 2025, and the filing date of March 26, 2026, establish the current reporting period. The absence of prior year comparisons means that trends in revenue, margins, or debt levels cannot be assessed from this document alone.

Key Financial Figures

• $2,000 — n the annual independent manager fee of $2,000 paid to Global Securitization Services,

Filing Documents

• duk-20251231.htm (10-K) — 93KB
• depncsfii-20251231xex311.htm (EX-31.1) — 7KB
• depncsfii-20251231xex331.htm (EX-33.1) — 50KB
• depncsfii-20251231xex332.htm (EX-33.2) — 79KB
• depncsfii-20251231xex341.htm (EX-34.1) — 8KB
• depncsfii-20251231xex342.htm (EX-34.2) — 7KB
• depncsfii-20251231xex351.htm (EX-35.1) — 6KB
• image_0a.jpg (GRAPHIC) — 74KB
• image_0b.jpg (GRAPHIC) — 8KB
• image_1a.jpg (GRAPHIC) — 18KB
• image_2a.jpg (GRAPHIC) — 9KB
• 0002078088-26-000004.txt ( ) — 636KB
• duk-20251231.xsd (EX-101.SCH) — 2KB
• duk-20251231_def.xml (EX-101.DEF) — 20KB
• duk-20251231_lab.xml (EX-101.LAB) — 36KB
• duk-20251231_pre.xml (EX-101.PRE) — 21KB
• duk-20251231_htm.xml (XML) — 6KB

Risk Factors

Item 1A. Risk Factors.

Cybersecurity

Item 1C. Cybersecurity.

Unresolved Staff Comments

Item 1B. Unresolved Staff Comments. None.

Legal Proceedings

Item 3. Legal Proceedings. None.

Mine Safety Disclosures

Item 4. Mine Safety Disclosures. None. PART II The following Items have been omitted pursuant to General Instruction J of Form 10-K:

Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

Selected Financial Data

Item 6. Selected Financial Data.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.

Quantitative and Qualitative Disclosures About Market Risk

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

Financial Statements and Supplementary Data

Item 8. Financial Statements and Supplementary Data.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

Controls and Procedures

Item 9A. Controls and Procedures.

Other Information

Item 9B. Other Information. None.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections. None. PART III

Directors, Executive Officers and Corporate Governance

Item 10. Directors, Executive Officers and Corporate Governance. Following are the managers and executive officers of Duke Energy Progress NC Storm Funding II LLC ("DEPNCSFII") as of the date of the report: Name Age Current and Recent Positions Held Nicholas J. Giaimo 44 Senior Vice President, Treasurer and Chief Risk Officer , Duke Energy Progress and Duke Energy Corporation. Mr. Giaimo has served in this role since January 2026, when he also assumed his role as President, Chief Financial Officer and Treasurer of DEPNCSFII. Prior to this, he served as Senior Vice President of Financial Planning & Analysis, from November 2024 to January 2026; Vice President Financial Planning & Analysis from May 2021 to November 2024; Director Financial Planning & Analysis Carolinas Electric Utilities, from August 2019 to May 2021; Director Financial Planning & Analysis and CFO of Natural Gas Segment, from October 2016 to August 2019. During his tenure at Piedmont Natural Gas, Mr. Giaimo served as Assistant Treasurer and Director Investor Relations from November 2014 to October 2016 and Manager Capital Markets and Investor Relations, August 2007 to November 2014. Abigail L. Motsinger 42 Senior Vice President, Chief Accounting Officer and Controller. Ms. Motsinger has been appointed to serve as Senior Vice President, Chief Accounting Officer and Controller, effective March 2026. Prior to that she was Vice President, Investor Relations from November 2022 until March 2026; Director, Jurisdictional Forecasting from May 2021 until November 2022; Investor Relations Manager from November 2017 until May 2021; and, prior to that, in various roles of increasing responsibility since joining Duke Energy in 2010. Her role as Manager and Controller of DEPNCSFII began in March 2026. Bernard J. Angelo 56 Senior Vice President of Global Securitization Services, LLC. Mr. Angelo assumed his role as Senior Vice President of Global Securitization Services in 1997. In addition, he assumed his rol

Executive Compensation

Item 11. Executive Compensation. Other than the annual independent manager fee of $2,000 paid to Global Securitization Services, LLC, DEPNCSFII does not pay any compensation to its managers or executive officers.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. None.

Certain Relationships and Related Transactions, and Director Independence

Item 13. Certain Relationships and Related Transactions, and Director Independence. None.

Principal Accounting Fees and Services

Item 14. Principal Accounting Fees and Services. Omitted pursuant to General Instruction J of Form 10-K. PART IV

Exhibits and Financial Statement Schedules

Item 15. Exhibits and Financial Statement Schedules. (a)(1) and (a)(2) Financial Statements and Financial Statement Schedules are omitted pursuant to General Instruction J of Form 10-K as listed under Item 8 of this report. (a)(3) and (b) See Exhibit Index included as the last part of this report, which is incorporated herein by reference. (c) Not applicable.

Form 10-K Summary

Item 16. Form 10-K Summary. None.

(b). Significant Obligors of Pool Assets

Item 1112(b). Significant Obligors of Pool Assets. None.

(b)(2). Credit Enhancement and Other Support, Except For Certain Derivative Instruments

Item 1114(b)(2). Credit Enhancement and Other Support, Except For Certain Derivative Instruments. None.

(b). Certain Derivative Instruments

Item 1115(b). Certain Derivative Instruments. None.

Legal Proceedings

Item 1117. Legal Proceedings. U.S. Bank National Association has provided the following information to the depositor: On March 9, 2018, a law firm purporting to represent fifteen Delaware statutory trusts (the "DSTs") that issued securities backed by student loans (the "Student Loans") filed a lawsuit in the Delaware Court of Chancery against U.S. Bank National Association ("U.S. Bank") in its capacities as indenture trustee and successor special servicer, and three other institutions in their respective transaction capacities, with respect to the DSTs and the Student Loans. This lawsuit is captioned The National Collegiate Student Loan Master Trust I, et al. v. U.S. Bank National Association, et al. , C.A. No. 2018-0167-JRS (Del. Ch.) (the "NCMSLT Action"). The complaint, as amended on June 15, 2018, alleged that the DSTs have been harmed as a result of purported misconduct or omissions by the defendants concerning administration of the trusts and special servicing of the Student Loans. Since the filing of the NCMSLT Action, certain Student Loan borrowers have made assertions against U.S. Bank concerning special servicing that appear to be based on certain allegations made on behalf of the DSTs in the NCMSLT Action. U.S. Bank has filed a motion seeking dismissal of the operative complaint in its entirety with prejudice pursuant to Chancery Court Rules 12(b)(1) and 12(b)(6) or, in the alternative, a stay of the case while other prior filed disputes involving the DSTs and the Student Loans are litigated. On November 7, 2018, the Court ruled that the case should be stayed in its entirety pending resolution of the first-filed cases. On January 21, 2020, the Court entered an order consolidating for pretrial purposes the NCMSLT Action and three other lawsuits pending in the Delaware Court of Chancery concerning the DSTs and the Student Loans, which remains pending. U.S. Bank denies liability in the NCMSLT Action and believes it has performed its obligations as inden

Affiliations and Certain Relationships and Related Transactions

Item 1119. Affiliations and Certain Relationships and Related Transactions. DEPNCSFII is a wholly owned subsidiary of Duke Energy Progress, LLC, which is the depositor, sponsor and servicer.

Compliance With Applicable Servicing Criteria

Item 1122. Compliance With Applicable Servicing Criteria. See Exhibits 33.1, 33.2, 34.1, and 34.2 of this Form 10-K.

Servicer Compliance Statement

Item 1123. Servicer Compliance Statement. See Exhibit 35.1 of this Form 10-K. SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS FILED PURSUANT TO SECTION 15(d) OF THE ACT BY REGISTRANTS WHICH HAVE NOT REGISTERED SECURITIES PURSUANT TO SECTION 12 OF THE ACT No such annual report, proxy statement, form of proxy or other proxy soliciting material has been sent to the registrant's security holders. The registrant will not be sending an annual report or proxy material to its security holders subsequent to the filing of this form. EXHIBIT INDEX Exhibits filed herewith are designated by an asterisk (*). All exhibits not so designated are incorporated by reference to a prior filing, as indicated. Exhibit No. Description of Exhibit 3.1 Certificate of Formation of Duke Energy Progress NC Storm Funding II LLC (incorporated by reference to Exhibit 3.1 to Registration Statement on Form SF-1 of Duke Energy Progress, LLC and Duke Energy P rogress NC S torm Funding II LLC filed o n July 23 , 2025 ) 3.2 Amended and Restated Limited Liability Company Agreement of Duke Energy Progress NC Storm Funding II LLC, dated and effective as of September 22, 2025 (incorporated by reference to Exhibit 3.2 to Form 8-K filed September 30, 2025 ) 4.1 Indenture, dated as of September 30, 2025 , by and between Duke Energy Progress NC Storm Funding II LLC and U.S. Bank Trust Company, N.A., as Indenture Trustee and U .S. Bank National Association , as Securities Intermediary and Account Bank (incorporated by reference to Exhibit 4.1 to Form 8-K filed September 30, 2025 ) 4.2 Series Supplement, dated as of September 30, 2025 , by and between Duke Energy Progress NC Storm Funding II LLC and U.S. Bank Trust Company, N.A., as Indenture Trustee (incorporated by reference to Exhibit 4.2 to Form 8-K filed September 30, 2025 ) 10.1 Storm Recovery Property Servicing Agreement, dated as of September 30, 2025 , by and between Duke Energy Progress NC Storm Funding II LLC, and Duke Energy Progr

SIGNATURES

SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrants have duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Date: March 26, 2026 DUKE ENERGY PROGRESS NC STORM FUNDING II LLC By: /s/ Abigail L. Motsinger Abigail L. Motsinger Controller and Manager DUKE ENERGY PROGRESS, LLC By: /s/ Abigail L. Motsinger Abigail L. Motsinger Senior Vice President, Chief Accounting Officer and Controller Duke Energy Progress, LLC

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