Fitch rates Appalachian Power notes BBB

Fitch Ratings said it assigned a rating of BBB to Appalachian Power Co.'s issuance of $300 million of 3.4% senior notes, series S, due May 2015. The notes are unsecured obligations and rank pari passu with other unsecured indebtedness. The proceeds will be used for general corporate purposes, including funding capital expenditures, repaying short-term debt and replenishing working capital.

The outlook is stable.

The ratings take into account the company's regulated electric operations in Virginia, West Virginia and Tennessee, as well as its affiliation with parent company, American Electric Power Co., Fitch said.

The company benefits from the operational and functional ties with American Electric, including participating in its power pool and money pool, the agency said.

Concerns facing the company relate to the continued exposure to struggling local economies in its service territory, as well as uncertainty regarding the outcome of pending rate requests in Virginia and West Virginia, Fitch said.

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