Fitch lifts Appalachian Power to BBB

Fitch Ratings said it upgraded the issuer default rating of Appalachian Power Co. to BBB from BBB-.

The agency also affirmed the issuer default ratings of American Electric Power Co. (AEP) and its other operating regulated utilities as follows: Ohio Power Co, AEP Texas Central Co. and AEP Texas North Co. at BBB+; Public Service Co. of Oklahoma at BBB; and Indiana Michigan Power Co. and Kentucky Power Co. at BBB-.

All outlooks remain stable.

Fitch said the upgrade of Appalachian Power reflects an above-expectation decline in financial leverage driven by strong operating performance and a lull in capex. The agency expects adjusted debt/EBITDAR to remain below 3.5 times during the rating horizon, which is commensurate with a BBB issuer default rating for an integrated utility company.

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