Moody’s rates West Penn bonds A1, Potomac Edison A3

Moody’s Investors Service said it assigned an A1 senior secured rating to certain outstanding first mortgage bonds of West Penn Power Co. and an A3 senior secured rating to certain outstanding first mortgage bonds of the Potomac Edison Co.

“The newly assigned senior secured ratings reflect our standard notching practice of maintaining two notches between the senior secured first mortgage bonds rating and the senior unsecured debt ratings for most U.S. regulated electric and gas utilities. First mortgage bondholders in the U.S. generally benefit from a first lien on most of the fixed assets used to provide utility service. In our view, very high recovery rates for first mortgage bonds in situations of default due to the critical nature of utility assets justify a two-notch uplift for the first mortgage bond rating,” the agency said in a press release.

The outlook for both companies is stable.

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