Fitch: Ohio Valley Electric view to negative

Fitch Ratings said it affirmed the Ohio Valley Electric Corp.’s long-term issuer default rating and senior unsecured debt rating at BBB- and revised the outlook to negative.

Fitch said the negative outlook follows FirstEnergy Corp.'s (BBB-) announcement that it is reviewing strategic options for its merchant subsidiary FirstEnergy Solutions Corp., including bankruptcy.

FirstEnergy currently holds a 4.85% entitlement in Ohio Valley Electric’s intercompany power agreement (ICPA).

A default at FirstEnergy could subject Ohio Valley Electric to a permanent revenue shortfall given that sponsors are severally responsible for their shares of Ohio Valley Electric’s operational and financial obligations under the terms of the ICPA.

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