Fitch affirms Indiana Michigan Power

Fitch Ratings said it affirmed Indiana Michigan Power Co.'s issuer default rating and preferred stock at BBB-, its senior unsecured debt at BBB and its short-term issuer default rating at F2.

The outlook is stable.

The agency said the ratings for Indiana Michigan Power reflect the company's stable and predictable cash flows from its vertically integrated utility operations and a relatively constructive regulatory environment in Indiana.

Rating concerns facing the company relate to the operating and financial risk of nuclear operations, as well as exposure to a large industrial customer base, which comprised 33% of consolidated revenues, Fitch said.

The adjusted debt-to-EBITDAR ratio for the 12 months ended Sept. 30 was 3.8 times, and debt leverage is forecasted to increase moderately as the company will be funding its capital expenditure program partly with debt.

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