Fitch rates AEP Transmission notes A-

Fitch Ratings said it assigned an A- rating to AEP Transmission Co. LLC's $325 million series J senior notes due 2048.

The notes are unsecured and unsubordinated obligations of the company.

Proceeds will be used for general corporate purposes including capex and repayment of advances from affiliates.

AEP’s long-term issuer default rating is BBB+ and its outlook is stable.

The agency said the ratings reflect the expected increase in leverage in the early years of the forecast period owing to the impact of the loss of bonus depreciation on near-term cash flows and the large capex budget.

Offsetting the initial high leverage is the stable and predictable nature of its transmission cash flows, Fitch said.

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