Moody’s lowers American Transmission to A2

Moody's Investors Service said it downgraded American Transmission Co. LLC's (ATC) issuer rating to A2 from A1.

The action concludes the review for downgrade that began on Oct. 27 following the Federal Energy Regulatory Commission's (FERC) order to lower authorized base returns on equity (ROEs) for transmission owners operating in the Midcontinent Independent System Operator, Inc. (MISO, A1 stable) region.

The outlook is stable.

"The downgrade reflects our expectation that ATC's financial profile will be weaker than historical levels going forward primarily due to lower FERC allowed ROEs and better positioned for the A2 rating category," Moody's vice president, senior analyst Jeffrey Cassella said in a news release.

"We expect ATC's ratio of funds from operations (FFO) to Net Debt to be in the 17% range going forward compared to about 20% historically."

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