Moody’s downgrades AEP, units

Moody’s Investors Service said it downgraded the long-term ratings of American Electric Power Co., Inc.’s senior unsecured rating to Baa2 from Baa1. Moody’s also lowered subsidiaries AEP Texas Inc.’s senior unsecured to Baa2 from Baa1, Ohio Power Co.’s senior unsecured to A3 from A2and Public Service Co. of Oklahoma’s senior unsecured to Baa1 from A3.

At the same time, Moody’s revised the outlooks for AEP, AEP Texas, OPCo and PSC to stable from negative. A complete list of rating actions is included below.

“The downgrades of AEP and utility subsidiaries AEP Texas, Ohio Power and Public Service of Oklahoma reflect weakened financial profiles that are being driven by large capital programs and an increased use of leverage,” said Laura Schumacher, a Moody’s vice president and senior credit officer, in a press release.

“Although AEP’s most recent financing plan includes an additional $1.3 billion of equity to fund its acquisition of the $2 billion North Central Wind projects in 2021, prior acquisitions and ongoing capital spending have added debt to all of the companies’ balance sheets,” the agency said.

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