Fitch affirms AEP Transmission

Fitch Ratings said it affirmed the BBB+ long-term issuer default rating and A- senior unsecured rating of AEP Transmission Co., LLC.

The outlook is stable.

Fitch said the affirmation reflects the stable and predictable nature of the company’s transmission cash flows, which helps to offset the ratings impact of increased leverage during the current period of elevated capex.

AEP Transmission benefits from constructive Federal Energy Regulatory Commission regulation, albeit with likely lower returns on equity going forward.

The ratings also consider AEP Transmission’s relationship with its parent, American Electric Power (BBB+/stable) and subsidiaries, Fitch explained. The ratings are not considered constrained by any of the American Electric Power entities at this time.

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