Moody's: AEP outlook positive

Moody's Investors Service said it revised the outlook for American Electric Power Co. (senior unsecured Baa3) to positive from stable. There is no change in the ratings or the outlook for the subsidiaries of AEP.

Moody's said the revision of AEP's outlook to positive is a reflection of a series of actions taken by AEP to improve its credit profile, including the sale of non-core assets, reducing the size of its energy trading activities, the issuance of equity, and deleveraging its balance sheet. The change in outlook also recognizes AEP's management team's strategy of focusing on its lower risk utility business.

An upgrade in AEP's ratings could be considered, Moody's said, if AEP demonstrates further deleveraging and a sustainable improvement in cash flow generation while maintaining a relatively stable business risk profile.

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