CORRECTION: Fitch Aff Am Elec Pwr/Addresses Certain Sub Rtgs Rfltng Pnding CSW Merger.Business Editors Note to Editors: The affirmation A solemn and formal declaration of the truth of a statement, such as an Affidavit or the actual or prospective testimony of a witness or a party that takes the place of an oath. An affirmation is also used when a person cannot take an oath because of religious convictions. press release issued by Fitch earlier today regarding 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. contained some incorrect information. Following is the corrected press release. NEW YORK--(BUSINESS WIRE)--June 1, 2000 Fitch, the international rating agency formed through the merger of Fitch IBCA IBCA International Braille Chess Association IBCA Institute of Burial and Cremation Administration IBCA Integrated Business Communications Alliance IBCA International Barbeque Cookers Association IBCA Department of Interior Board of Contract Appeals and Duff & Phelps Credit Rating Co., has affirmed af·firm v. af·firmed, af·firm·ing, af·firms v.tr. 1. To declare positively or firmly; maintain to be true. 2. To support or uphold the validity of; confirm. v.intr. the credit ratings of American Electric Power Company, Inc. (AEP AEP - Application Environment Profile ) and has taken various rating actions on its domestic utility subsidiaries as well as on Central and South West Corp. (CSW CSW Commission on the Status of Women CSW Christian Solidarity Worldwide CSW Clinical Social Worker CSW College of the Southwest (New Mexico) CSW Cambridge SoundWorks (audio manufacturer) ) (NYSE NYSE See: New York Stock Exchange : CSR (1) (Customer Service Representative) A person who handles a customer's request regarding a bill, account changes or service or merchandise ordered. Agents in call centers are known as CSRs. See call center. ) and certain of its domestic subsidiaries. AEP is expected to complete its acquisition of CSW later this month. The rating actions incorporate Fitch's expectation that the merger closes as expected. The rating actions address changes relative to ratings previously assigned by both Fitch IBCA, Inc. (Fitch IBCA) and Duff & Phelps Credit Rating Co. (DCR DCR Department of Conservation and Recreation DCR Decrease DCR Digital Cable Ready (television) DCR Dark Crisis (Yu-Gi-Oh! cards) DCR Debt Coverage Ratio DCR Dacryocystorhinostomy ). (Ratings are designated as follows: Issuer; bond description; the new Fitch (Fitch) rating; former Duff & Phelps (DCR) rating; former Fitch IBCA (FI) rating.) American Electric Power, Inc. --Implied Sr Unsec Debt, `BBB BBB A medium grade assigned to a debt obligation by a rating agency to indicate an adequate ability to pay interest and repay principal. However, adverse developments are more likely to impair this ability than would be the case for bonds rated A and above. +' (Fitch), `BBB+' (DCR), No Rating (FI). --Commercial Paper `F2' (Fitch), `D-2' (DCR), No Rating (FI). AEP Resources, Inc. --Sr Unsec Notes, `BBB+' (Fitch), `BBB+' (DCR), No Rating (FI). * The rating of AEP Resources reflects that of AEP due to a substantive Support Agreement. Central & South West Corporation --Commercial Paper, `F2' (Fitch), `D-2' (DCR), No Rating (FI). Appalachian Power Company --First Mtge Bonds/Secured MTN MTN A short-form for Medium Term Note. MTN Medium term notes issued by corporations, much like shorter-term commercial paper. MTN See medium-term note (MTN). , `A-' (Fitch), `A' (DCR), `A' (FI). --Unsec Notes/Debentures, `BBB+' (Fitch), `A-' (DCR), No Rating (FI). --Jr. Sub Debentures, `BBB' (Fitch), `BBB+' (DCR), No Rating (FI). --Preferred Stock, `BBB' (Fitch), `BBB+' (DCR), No Rating (FI). --Commercial Paper, `F2' (Fitch), `D-1' (DCR), `F2' (FI). Central Power and Light Company --First Mtge Bonds/Coll PCRB PCRB Pennsylvania Compensation Rating Bureau PCRB Program Change Review Board PCRB Posterior Cramer-Rao Bound PCRB Police Complaint Review Board , `A' (Fitch), `A' (DCR), No Rating (FI). --PCRB-MBIA Insured, `AAA' (Fitch), `AAA' (DCR), No Rating (FI). --Unsec PCRB/PURS, `A-' (Fitch), `A-' (DCR), No Rating (FI). --Trust Preferred Securities, `BBB+' (Fitch), `BBB+' (DCR), No Rating (FI). --Preferred Stock, `BBB+' (Fitch), `BBB+' (DCR), No Rating (FI). Columbus Southern Power Company --First Mtge Bonds/Secured MTN, `A' (Fitch), `A' (DCR), `A-' (FI). --Unsec Notes/Debentures, `A-' (Fitch), `A-' (DCR), No Rating (FI). --Jr. Sub Debentures, `BBB+' (Fitch), `A-' (DCR), No Rating (FI). --Preferred Stock, `BBB+' (Fitch), `BBB+' (DCR), No Rating (FI). --Commercial Paper, `F1' (Fitch), `D-1' (DCR), `F1' (FI). Indiana Michigan Power Company --First Mtge Bonds/Secured MTN, `BBB+' (Fitch), `BBB+' (DCR), `BBB+' (FI). --Unsec Notes/Debentures, `BBB' (Fitch), `BBB' (DCR), No Rating (FI). --Jr. Sub Debentures, `BBB-' (Fitch), `BBB-' (DCR), No Rating (FI). --Preferred Stock, `BBB-' (Fitch), `BBB-' (DCR), No Rating (FI). --Commercial Paper, `F2' (Fitch), `D-2' (DCR), `F2' (FI). Kentucky Power Company --First Mtge Bonds/Secured MTN, `BBB+' (Fitch), `BBB+' (DCR), `BBB+' (FI). --Unsec Notes/Debentures, `BBB' (Fitch), `BBB' (DCR), No Rating (FI). --Jr. Sub Debentures, `BBB-' (Fitch), `BBB-' (DCR), No Rating (FI). --Commercial Paper, `F2' (Fitch), `D-2' (DCR), `F2' (FI). Ohio Power Company --First Mtge Bonds/Secured MTN, `A-' (Fitch), `A-' (DCR), `A-' (FI). --Unsec Notes/Debentures, `BBB+' (Fitch), `BBB+' (DCR), No Rating (FI). --Jr. Sub Debentures, `BBB' (Fitch), `BBB' (DCR), No Rating (FI). --Preferred Stock, `BBB' (Fitch), `BBB' (DCR), No Rating (FI). --Commercial Paper, `F2' (Fitch), `D-2' (DCR), `F2' (FI). Public Service Company of Oklahoma --First Mtge Bonds, `A+' (Fitch), `AA-' (DCR), No Rating (FI). --PCRB-MBIA Insured, `AAA' (Fitch), `AAA' (DCR), No Rating (FI). --Unsec PCRB, `A' (Fitch), `A+' (DCR), No Rating (FI). --Trust Preferred Securities, `A-' (Fitch), `A+' (DCR), No Rating (FI). --Preferred Stock, `A-' (Fitch), `A+' (DCR), No Rating (FI). Southwestern Electric Power Company --First Mtge Bonds, `A+' (Fitch), `AA' (DCR), No Rating (FI). --Unsec PCRB, `A' (Fitch), `AA-' (DCR), No Rating (FI). --Preferred Stock, `A-' (Fitch), `AA-' (DCR), No Rating (FI). --Trust Preferred Securities, `A-' (Fitch), No Rating (DCR), No Rating (FI). West Texas Utilities Company --First Mtge Bonds, `A' (Fitch), `A+' (DCR), No Rating (FI). --PCRB-MBIA Insured, `AAA' (Fitch), `AAA' (DCR), No Rating (FI). --Preferred Stock, `A-' (Fitch), `A' (DCR), No Rating (FI). The commercial paper ratings of Appalachian Power, CSW, Columbus Southern Power, Indiana Michigan Power, Kentucky Power and Ohio Power will be removed in the near future as the outstanding debt under each company's program is refinanced under AEP's Money Pool program being implemented. Going forward, AEP will coordinate short-term liquidity for all of its utilities similar to CSW's prior money pool program. The rating actions on Southwestern Electric Power and Public Service of Oklahoma reflect adjustments to align those companies' ratings in relation to those of parent company AEP. The rating actions on Appalachian Power and West Texas Utilities reflect financial risk profiles that are commensurate com·men·su·rate adj. 1. Of the same size, extent, or duration as another. 2. Corresponding in size or degree; proportionate: a salary commensurate with my performance. 3. with their new rating categories. Any rating actions on companies for which the senior rating does not change reflect the structural priority of the securities being changed relative to higher rated securities. AEP is soon expected to complete its acquisition of CSW in a stock-for-stock transaction valued at approximately $6.6 billion that was originally announced in December 1997. Approximately 55 percent of the expected $2 billion of cost savings over the first 10 years will be shared with ratepayers. The balance is expected to be retained for the benefit of the shareholders. In addition to the cost savings, benefits from the merger include a more diversified diversified (di·verˑ·s generation portfolio and a broadly diversified service territory encompassing more than 4.6 million customers across 11 states. AEP will be the largest domestic electric generator with more than 38,000 mw of capacity while being both the largest coal-fired generator and the third largest gas-fired generator. AEP is expected to continue to be characterized by a low-cost generation portfolio and competitive retail rate structures that will lessen less·en v. less·ened, less·en·ing, less·ens v.tr. 1. To make less; reduce. 2. Archaic To make little of; belittle. v.intr. To become less; decrease. competitive pressures as markets open to competition. Rating issues include significant off-balance-sheet, debt-like lease obligations, an increasing business risk profile as markets deregulate deregulate To reduce or eliminate control. One of the major forces in the financial markets in the 1970s and 1980s was the federal government's decision to deregulate interest rates. , inherent energy trading and marketing risks, the uncertain future and the financial impact of the troubled Cook nuclear plant and heightening height·en v. height·ened, height·en·ing, height·ens v.tr. 1. To raise or increase the quantity or degree of; intensify. 2. To make high or higher; raise. v.intr. longer-term environmental pressures that could impact the viability and competitiveness of its coal-fired generation fleet. In addition, AEP will need to structurally review its operations as states deregulate generation and retail services. The vast majority of its service territory will be deregulated by mid-2002. Post-closing, AEP will be a public utility holding company for 11 electric utility companies serving more than 4.7 million retail customers in 11 states, and a variety of nonregulated businesses involved in the energy industry across five continents. The primary nonregulated investments would be its full ownership of SEEBOARD SEEBOARD South Eastern Electricity Board (UK) and 50 percent ownership of Yorkshire, two regional electric companies in the U.K., as well as a fast-growing energy marketing and trading subsidiary and interests in various domestic and international power generation projects. Nonregulated energy assets are housed in AEP Resources, CSW Energy and CSW International. AEP Credit (f/k/a CSW Credit) will factor account receivables account receivable Any amount owed to a business as the result of a purchase of goods or services from it on a credit basis. Although the firm making the sale receives no written promise of payment, it enters the amount due as a current asset in its books. from the various domestic electric utilities and other non-affiliated utilities on a non- recourse basis. |
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