Fitch Rates Indiana Michigan Power Co's Sr Notes 'BBB'.NEW YORK New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of -- Fitch Ratings assigns a 'BBB' rating to Indiana Michigan Power Co.'s (IMP) $175 million issuance of senior notes due 2014. The Rating Outlook is Stable. Indiana Michigan Power Co.'s ratings are based on the company's position as a vertically integrated electric utility, constructive regulatory environment, and improving financial condition. Nuclear exposure and a large industrial customer base are primary credit concerns. IMP's credit quality benefits from the lack of retail competition in Indiana, which accounts for 84% of the company's electric revenues. Currently, there are no deregulation Deregulation The reduction or elimination of government power in a particular industry, usually enacted to create more competition within the industry. Notes: Traditional areas that have been deregulated are the telephone and airline industries. initiatives in Indiana nor are any expected, which should allow IMP to maintain stable earnings and cash flow. The company also operates in Michigan, which has retail competition. However, currently no alternative providers are operating in the area as it is difficult to compete against IMP's low rates. IMP benefits from participating in the AEP AEP - Application Environment Profile power pool with its efficient electric operations and coal procurement. However, due to AEP's highly centralized electric and treasury operations, any deterioration in the credit quality of AEP (senior unsecured debt rated 'BBB' by Fitch) could impair the ratings of IMP. The company's credit measures have recovered from the extensive outage at its Cook nuclear plants from 2000-2002 during which time only a portion of the repair and replacement power costs were recoverable. Credit measures including leverage as measured by debt to 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 are now appropriate for the ratings category, even when adjusted to include off-balance-sheet lease obligations relating to the Rockport plant. Indiana Michigan Power Company 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 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. (AEP). IMP is currently engaged in the generation, transmission, and distribution of electric power for approximately 567,000 customers in Indiana and southern Michigan. |
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