Fitch assigns BBB- to Allegheny Energy Supply MTNs, loan

Fitch Ratings said it assigned a BBB- rating to Allegheny Energy Supply Co. LLC's planned $600 million issuance of unsecured medium-term notes and a BBB- rating to the company's planned $1 billion unsecured revolving credit facility.

Fitch currently rates the company's issuer default rating BBB- with a stable outlook.

The MTN issuance involves two tranches, with $350 million of 10-year MTNs due Oct. 15, 2019 and $250 million of 30-year MTNs due Oct. 15, 2039. The MTN issuance is expected to close on Oct. 1.

The company will use the proceeds to redeem the company's $447 million term loan due May 2, 2011 and to finance the repurchase of up to $150 million of its 7.8% notes due March 15, 2011.

Fitch said Allegheny Energy Supply's ratings and outlook consider the cash flow from the company's more than 7,000 megawatts of generation capacity in the competitive PJM market as well as its dependence on coal as its primary fuel source.

The ratings and stable outlook also reflect the company's early refinancing of debt maturing in 2011 and the revolver's increased capacity and later maturity date of September 2012.

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