Fitch Reaffirms AEP/Addresses Certain Sub Rtgs Rfltng Pending CSW Merger.Business Editors NEW YORK--(BUSINESS WIRE)--June 1, 2000 Fitch has reaffirmed the credit ratings of 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. 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 those previously held both by 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 , 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 ), who completed their own merger today, forming Fitch. [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 Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. , `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). 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. Shortly, AEP is expected to complete its acquisition of CSW in a stock-for-stock transaction valued at approximately $6.6 billion that was originally announced in Dec. 1997. Approximately 55 percent of the expected $2 billion of cost savings over the first ten years will be shared with ratepayers. The balance will be retained by the shareholders. Besides 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 eleven 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 can be expected to continue to be characterized char·ac·ter·ize tr.v. character·ized, character·iz·ing, character·iz·es 1. To describe the qualities or peculiarities of: characterized the warden as ruthless. 2. 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 shut down 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 eleven electric utility companies serving more than 4.7 million retail customers in eleven 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. |
|
||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion