Moody's rates ITC bonds A3, notes Baa3

Moody's Investors Service said it assigned an A3 rating to $175 million of first-mortgage bonds to be issued by ITC Midwest LLC.

Moody's said it also assigned a Baa3 rating to $385 million of new senior unsecured notes to be issued by its parent company, ITC Holdings Corp.

The outlook for both is positive.

Proceeds from the ITC Midwest first-mortgage bonds and the ITC Holdings senior unsecured notes will be used to repay a portion of the $765 million bridge loan incurred by ITC Holdings to fund ITC Midwest's acquisition of the electric transmission assets of Interstate Power & Light (A3 senior unsecured, stable), the agency said.

Moody's said that the A3 senior secured rating of ITC Midwest reflects its expectation of stable cash flows and a strong financial profile for this new issuer, which is based on the same low business risk operating model as ITC Holdings' other utility operating subsidiaries.

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