Fitch rates AEP Transmission BBB+, debt A-

Fitch Ratings said it assigned a long-term issuer default rating of BBB+ and senior unsecured debt rating of A- to AEP Transmission Co. LLC (AEP Transco).

The outlook is stable.

Fitch said the ratings and outlook reflect AEP Transco's low business risk profile as a Federal Energy Regulatory Commission-regulated electric transmission utility company with modest regulatory lag and earnings volatility.

The ratings also reflect the financial support provided by its ultimate parent American Electric Power Co Inc. (AEP; issuer default rating BBB) to maintain a capital structure with 50% equity during a period of rapid expansion. Fitch expects adjusted debt/EBITDAR and FFO fixed-charge coverage to improve to 4.5 times to 5and 5 times to 6 times, respectively by 2018.

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