Fitch rates Alabama Power notes A+

Fitch Ratings said it assigned an A+ rating to the $300 million 4.85% 2007D senior notes due Dec. 15, 2012 issued by Alabama Power Co. The notes are being issued under the documentation of the series 2007D senior notes issued on Dec. 12 and will increase the total size of that series to $500 million.

The outlook is stable.

The proceeds will be used to reduce short-term debt, of which the company had $188 million as of Jan. 7.

The agency said Alabama Power's ratings are supported by a relatively low-cost coal and nuclear-dominated generation fleet, stable coverage ratios that are consistent with rating category targets and a constructive state regulatory environment in Alabama.

Fitch's rating concerns relate to the higher-than-average concentration of industrial customers, lags in the recovery of rising fuel, unanticipated increases in operating and maintenance costs, the susceptibility of the territory to hurricanes and significant capital spending associated with environmental matters and system growth and reliability.

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