AEP Texas North's Senior Notes Rated 'A-' by Fitch Ratings.Business Editors NEW YORK--(BUSINESS WIRE)--Feb. 13, 2003 Fitch Ratings Fitch Ratings An international rating agency for financial institutions, insurance companies, and corporate, sovereign, and municipal debt. Fitch Ratings has headquarters in New York and London and is wholly owned by FIMALAC of Paris. has assigned an 'A-' rating to AEP AEP - Application Environment Profile Texas North Company's (Texas North) previously West Texas Utilities Co. $225 million offering of senior notes due in 2013. Proceeds will be used to pay down short-term debt Short-term debt Debt obligations, recorded as current liabilities, requiring payment within the year. and refinance maturing debt. The Rating Outlook remains Stable. The ratings take into consideration Texas North's moderate leverage and strong cash flow as well as its slow growth service territory. The risk profile of Texas North has decreased through the sale of its retail electric provider business to Centrica. Texas North's credit profile is further enhanced by its affiliation with its parent, American Electric Power American Electric Power (NYSE: AEP) is a major investor-owner electric utility in various parts of the United States. It is headquartered in Columbus, Ohio. It serves parts of 11 states, and is currently the largest electricity generating utility in the United States. Co, Inc. (AEP), which enables the company to participate in the AEP power pool and to benefit from its financial expertise. Texas North's leverage in terms of debt to total capitalization is moderately high for the ratings category at 61.4% as of Sept. 30, 2002, however Fitch deems Debt to Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become to be a more accurate measure of leverage and at 2.97 times (x) is commensurate with the ratings category. Also interest protection is strong with the ratio of EBITDA to interest at 5.54x for the twelve months ending Sept. 30, 2002. Texas North is a wholly owned subsidiary Wholly Owned Subsidiary A subsidiary whose parent company owns 100% of its common stock. Notes: In other words, the parent company owns the company outright and there are no minority owners. of the American Electric Power Co., Inc. and is engaged in the generation, transmission and distribution of electric power to 190,000 retail customers in western Texas. |
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion