S&P lowered AEP´s rating to BBB from BBB+. The BBB rating is investment grade and applies to all AEP operating companies as S&P uses a uniform rating for all of a company´s subsidiaries.
"Because we had been on negative watch, the action was not entirely surprising," said Susan Tomasky, AEP executive vice president and chief financial officer. "We are pleased the agency´s review has concluded, and that AEP now has a stable rating. We´re also pleased S&P acknowledged that we can regain its higher ratings by continuing to demonstrate our commitment to improving our financial profile."
AEP´s available liquidity is approximately $4 billion, including nearly $1.9 billion in cash. A portion of this total includes proceeds from the company’s recent equity offering, which will be used to reduce debt. Last month, the company issued notes totaling more than $2 billion in proceeds and received commitments to extend a $1.5 billion credit facility two months before its maturity date. The equity offering completed last week raised more than $1 billion.
"S&P´s downgrade is based on their risk profile of the company," Tomasky said. "We intend to reduce our risk profile this year with a continued focus on our utility businesses.
"We believe the agency´s decision to close its review shows that S&P is confident that we will continue to strengthen our balance sheet and reduce debt," Tomasky said. "Our efforts already are reaping results. The unchanged commercial paper rating confirms that our ability to access capital markets remains strong. We are committed to taking the necessary steps to strengthen our ratings."
American Electric Power owns and operates more than 42,000 megawatts of generating capacity in the United States and select international markets and is the largest electricity generator in the U.S. AEP is also one of the largest electric utilities in the United States, with almost 5 million customers linked to AEP’s 11-state electricity transmission and distribution grid. The company is based in Columbus, Ohio.
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The comments set forth above include forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, including (1) statements concerning the Company´s plans, objectives, expected performance and expenditures and (2) other statements that are other than statements of historical fact. These forward-looking statements reflect assumptions, and involve a number of risks and uncertainties. Among the factors that could cause actual results to differ materially from forward-looking statements are electric load and customer growth, abnormal weather conditions, availability of generating capacity, the ability to recover net regulatory assets and other stranded costs in connection with deregulation of generation, the outcome of environmental regulation and litigation, the impact of fluctuation in commodity prices and interest rates, and other risks and unforeseen events over which the Company has no control. The reader is also directed to the Company´s periodic filings with the Securities and Exchange Commission for additional factors that may impact the Company´s results of operations and financial condition. Furthermore, historical results may not be indicative of the Company´s future performance.
Contacts:
Media: Pat Hemlepp
Director, Corporate Media Relations
614/716-1620
Analysts: Bette Jo Rozsa
Managing Director, Investor Relations
614/716-2840
Media: Pat Hemlepp
Director, Corporate Media Relations
614/716-1620
Analysts: Bette Jo Rozsa
Managing Director, Investor Relations
614/716-2840