Fitch lifts American Electric, subsidiaries

Fitch Ratings said it upgraded American Electric Power Co.’s (AEP) long-term issuer default ratings and senior unsecured ratings to BBB+ from BBB and affirmed its short-term issuer default rating and commercial paper ratings at F2.

The agency said the upgrade is based on AEP's improved risk profile as a result of its actions to exit merchant generation, transition of the regulated generation fleet away from coal generation, ongoing efforts in improve regulated returns, and expected maintenance of consistent credit metrics despite elevated capital expenditures.

Additionally, Fitch upgraded the long-term issuer default ratings of Kentucky Power Co., Indiana Michigan Power Co. and Southwestern Electric Power Co. to BBB from BBB- and their senior unsecured ratings to BBB+ from BBB.

The upgrades recognize the close financial relationship with an improved parent, as well as continued efforts to secure additional rate relief in those subsidiaries' jurisdictions.

Fitch also upgraded Ohio Power Co.’s long-term issuer default rating to A- from BBB+ and senior unsecured ratings to A from A-. The recommendation is based upon very strong credit metrics resultant from Ohio's favorable regulatory regime.

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