Recipient email addresses will not be used in mailing lists or redistributed.
Use semicolon to separate each address, limit to 20 addresses.
characters you see
You have successfully sent the research.
Please note: some research requires a paid subscription in order to access.
Already a customer?
Don't want to see this again?
Accept our to continue to Moodys.com:
AND SCROLL DOWN!
By clicking “I AGREE” [at the end of this document],
you indicate that you understand and intend these terms and conditions to be
the legal equivalent of a signed, written contract and equally binding, and
that you accept such terms and conditions as a condition of viewing any and all
Moody’s information that becomes accessible to you [after clicking “I AGREE”] (the
“Information”). References herein to “Moody’s” include Moody’s
Corporation, Inc. and each of its subsidiaries and affiliates.
Terms of One-Time Website Use
you have entered into an express written contract with Moody’s to the contrary,
you agree that you have no right to use the Information in a commercial or
public setting and no right to copy it, save it, print it, sell it, or publish
or distribute any portion of it in any form.
acknowledge and agree that Moody’s credit ratings: (i) are current opinions of
the future relative creditworthiness of securities and address no other risk; and
(ii) are not statements of current
or historical fact or recommendations to purchase, hold or sell particular
securities. Moody’s credit ratings and
publications are not intended for retail investors, and it would be reckless
and inappropriate for retail investors to use Moody’s credit ratings and
publications when making an investment decision. No
warranty, express or implied, as the accuracy, timeliness, completeness,
merchantability or fitness for any particular purpose of any Moody’s credit
rating is given or made by Moody’s in any form whatsoever.
3. To the extent permitted by law, Moody’s and its directors,
officers, employees, representatives, licensors and suppliers disclaim
liability for: (i) any indirect, special, consequential, or incidental losses
or damages whatsoever arising from or in connection with use of the
Information; and (ii) any direct or compensatory damages caused to any person
or entity, including but not limited to by any negligence (but excluding fraud
or any other type of liability that by law cannot be excluded) on the part of
Moody’s or any of its directors, officers, employees, agents, representatives,
licensors or suppliers, arising from or in connection with use of the
4. You agree to read [and
be bound by] the more detailed disclosures regarding Moody’s ratings and the
limitations of Moody’s liability included in the Information.
5. You agree that any disputes relating to this agreement or your use of
the Information, whether sounding in contract, tort, statute or otherwise,
shall be governed by the laws of the State of New York and shall be subject to
the exclusive jurisdiction of the courts of the State of New York located in
the City and County of New York, Borough of Manhattan.
11 Dec 2002
MOODY'S DOWNGRADES AMERICAN ELECTRIC POWER COMPANY (Sr.Uns. to Baa2 from Baa1) AND PLACES PRIME-2 COMMERCIAL PAPER RATING UNDER REVIEW FOR POSSIBLE DOWNGRADE
Approximately $13 Billion of Debt Securities Affected
New York, December 11, 2002 -- Moody's Investors Service downgraded American Electric Power Company's
(AEP) senior unsecured rating to Baa2 from Baa1, and placed its
Prime-2 rating for commercial paper under review for possible downgrade.
AEP's Baa2 long-term rating remains under review for possible downgrade.
Moody's also placed the long-term ratings of subsidiaries Public
Service Company of Oklahoma (Senior Secured A1) and Appalachian Power
Company (Senior Secured A3) under review for possible downgrade.
The ratings of subsidiaries Ohio Power Company (Sr. Sec.
A3), Columbus Southern Power Company (Sr. Sec. A3),
Central Power and Light Company (Sr. Sec. A3), West
Texas Utilities Company (Sr. Sec. A2), and Southwestern
Electric Power Company (Sr. Sec. A1), all remain under
review for possible downgrade. Additionally, the ratings
of Indiana Michigan Power Company (Sr. Sec. Baa1) and Kentucky
Power Company (Sr. Sec. Baa1) are confirmed with a stable
These rating actions reflect:
(1) Declining earnings and operating cash flow on a consolidated basis;
(2) Weaker operating performance and cash flow generation at a number
of the operating utilities relative to their respective debt obligations;
(3) Poor returns from substantial non-regulated investments,
some of which may require additional funding requirements, while
others could eventually result in impairment charges;
(4) A high dividend pay-out ratio which reduces financial flexibility
at AEP and at its operating subsidiaries;
(5) A continuing financial drag from the large energy trading business
while the company winds down its speculative trading activity.
The company's results have weakened in 2002, with substantial declines
in funds from operations and cash from operations. Volatility in
operating performance and working capital requirements partly result from
the company's large trading and marketing platform. While the company
has decided to exit the speculative energy trading business, the
actual unwinding of the bulk of this portfolio will likely occur over
at least a two year period, and will require additional funding
from AEP to satisfy counter-party obligations, particularly
in its natural gas trading book. Additionally, AEP has sizeable
investments in a number of underperforming assets in the US and abroad.
These assets include its investment in the communications business as
well as its investment in the UK generation sector, through Fiddlers
Ferry and Ferrybridge. A number of these underperforming investments
may also require additional capital and potentially could be written-down,
impacting AEP's balance sheet.
The company continues to pay a large dividend to shareholders, which
weakens the balance sheet of the holding company and of each of the operating
subsidiaries. While a portion of AEP's short-term obligations
relate to the AEP money pool established to fund its regulated utilities,
a sizeable amount of remaining holding company debt exists, and
is structurally subordinated to the secured and unsecured obligations
at AEP's subsidiaries. Moody's further notes that the operating
performance and cash flow generation of a number of the regulated utilities
has been weak relative to the companies' individual debt burden and capital
AEP appears to have reasonably strong liquidity to support its businesses.
The company has taken steps to strengthen liquidity and to reduce leverage
through the sale of common equity and the sale of two large international
investments, CitiPower and Seeboard
The ratings review will also consider the rating implications for the
Texas and Ohio subsidiaries that will be separated into generation and
transmission and distribution companies. Additionally, Moody's
anticipates that the rating differential among the AEP operating utilities
is likely to narrow relative to the current ratings because of the degree
to which AEP operates the regulated businesses as a single system,
which enhances the benefits of diversification but also more closely links
the various member companies. Moody's does not currently anticipate
that the rating of AEP's senior unsecured debt would fall below investment
The long term ratings of the following issuers were downgraded and remain
under review for further possible downgrade:
· AEP, senior unsecured and issuer rating to Baa2 from Baa1
· AEP Resources (gtd. by AEP), senior unsecured and
issuer rating to Baa2 from Baa1
The following ratings were placed under review for possible downgrade:
· American Electric Power Company, commercial paper at Prime-2
· Public Service Company of Oklahoma, senior secured at A1,
senior unsecured and issuer rating at A2, junior subordinate debt
issued by PSO Capital at A3, preferred stock at Baa1
· Appalachian Power Company, senior secured at A3,
senior unsecured and issuer rating at Baa1, preferred stock at Baa3
The ratings of the following issuers remain under review for possible
· Ohio Power Company, senior secured, senior unsecured,
and issuer rating at A3, preferred stock at Baa2
· Columbus Southern Power Company, senior secured,
senior unsecured, and issuer rating at A3, preferred stock
· Central Power and Light Company, senior secured at A3,
senior unsecured and issuer rating at Baa1, trust preferred issued
by CPL Capital at Baa2, preferred stock at Baa3
· West Texas Utilities Company, senior secured at A2,
issuer rating at A3, preferred stock at Baa2
· Southwestern Electric Power Company, senior secured at
A1, issuer rating at A2, junior subordinate debt issued by
SWEPCO Capital at A3, preferred stock at Baa1
The ratings of the following issuers were confirmed:
· Indiana Michigan Power Company, senior secured at Baa1,
senior unsecured and issuer rating at Baa2, junior subordinate debt
at Baa3, preferred stock at Ba1
· Kentucky Power Company, senior secured at Baa1, senior
unsecured and issuer rating at Baa2, junior subordinate debt at
Baa3, preferred stock at Ba1
· RGS (I&M) Funding Corporation, senior secured lease
obligation bonds at Baa2
· RGS (AEGCO) Funding Corporation, senior secured lease obligation
bonds at Baa2
Headquartered in Columbus Ohio, AEP is an energy company that owns
and operates more than 42,000 megawatts of generating capacity in
the US and in certain international markets and is the largest electricity
generator in the U.S. It sells electricity to almost 5 million
customers linked through the company's 11-state electricity transmission
and distribution grid.
Moody's Investors Service
VP - Senior Credit Officer
Moody's Investors Service
No Related Data.
© 2020 Moody's Corporation, Moody's Investors Service, Inc., Moody's Analytics, Inc. and/or their licensors and affiliates (collectively, "MOODY'S"). All rights reserved.
CREDIT RATINGS ISSUED BY MOODY'S INVESTORS SERVICE, INC. AND/OR ITS CREDIT RATINGS AFFILIATES ARE MOODY'S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES, AND MATERIALS, PRODUCTS, SERVICES AND INFORMATION PUBLISHED BY MOODY'S (COLLECTIVELY, "PUBLICATIONS") MAY INCLUDE SUCH CURRENT OPINIONS. MOODY'S INVESTORS SERVICE DEFINES CREDIT RISK AS THE RISK THAT AN ENTITY MAY NOT MEET ITS CONTRACTUAL FINANCIAL OBLIGATIONS AS THEY COME DUE AND ANY ESTIMATED FINANCIAL LOSS IN THE EVENT OF DEFAULT OR IMPAIRMENT. SEE MOODY'S RATING SYMBOLS AND DEFINITIONS PUBLICATION FOR INFORMATION ON THE TYPES OF CONTRACTUAL FINANCIAL OBLIGATIONS ADDRESSED BY MOODY'S INVESTORS SERVICE CREDIT RATINGS. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS, NON-CREDIT ASSESSMENTS ("ASSESSMENTS"), AND OTHER OPINIONS INCLUDED IN MOODY'S PUBLICATIONS ARE NOT STATEMENTS OF CURRENT OR HISTORICAL FACT. MOODY'S PUBLICATIONS MAY ALSO INCLUDE QUANTITATIVE MODEL-BASED ESTIMATES OF CREDIT RISK AND RELATED OPINIONS OR COMMENTARY PUBLISHED BY MOODY'S ANALYTICS, INC. AND/OR ITS AFFILIATES. MOODY'S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS DO NOT CONSTITUTE OR PROVIDE INVESTMENT OR FINANCIAL ADVICE, AND MOODY'S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS ARE NOT AND DO NOT PROVIDE RECOMMENDATIONS TO PURCHASE, SELL, OR HOLD PARTICULAR SECURITIES. MOODY'S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS DO NOT COMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR. MOODY'S ISSUES ITS CREDIT RATINGS, ASSESSMENTS AND OTHER OPINIONS AND PUBLISHES ITS PUBLICATIONS WITH THE EXPECTATION AND UNDERSTANDING THAT EACH INVESTOR WILL, WITH DUE CARE, MAKE ITS OWN STUDY AND EVALUATION OF EACH SECURITY THAT IS UNDER CONSIDERATION FOR PURCHASE, HOLDING, OR SALE.
MOODY'S CREDIT RATINGS,
ASSESSMENTS, OTHER OPINIONS, AND PUBLICATIONS ARE NOT INTENDED FOR USE BY RETAIL INVESTORS AND IT WOULD BE RECKLESS AND INAPPROPRIATE FOR RETAIL INVESTORS TO USE MOODY'S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS OR PUBLICATIONS WHEN MAKING AN INVESTMENT DECISION. IF IN DOUBT YOU SHOULD CONTACT YOUR FINANCIAL OR OTHER PROFESSIONAL ADVISER.
ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY LAW, INCLUDING BUT NOT LIMITED TO, COPYRIGHT LAW, AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT MOODY'S PRIOR WRITTEN CONSENT.
MOODY'S CREDIT RATINGS,
ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS ARE NOT INTENDED FOR USE BY ANY PERSON AS A BENCHMARK AS THAT TERM IS DEFINED FOR REGULATORY PURPOSES AND MUST NOT BE USED IN ANY WAY THAT COULD RESULT IN THEM BEING CONSIDERED A BENCHMARK.
All information contained herein is obtained by MOODY'S from sources believed by it to be accurate and reliable. Because of the possibility of human or mechanical error as well as other factors, however, all information contained herein is provided "AS IS" without warranty of any kind. MOODY'S adopts all necessary measures so that the information it uses in assigning a credit rating is of sufficient quality and from sources MOODY'S considers to be reliable including, when appropriate, independent third-party sources. However, MOODY'S is not an auditor and cannot in every instance independently verify or validate information received in the rating process or in preparing its Publications.
To the extent permitted by law, MOODY'S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability to any person or entity for any indirect, special, consequential, or incidental losses or damages whatsoever arising from or in connection with the information contained herein or the use of or inability to use any such information, even if MOODY'S or any of its directors, officers, employees, agents, representatives, licensors or suppliers is advised in advance of the possibility of such losses or damages, including but not limited to: (a) any loss of present or prospective profits or (b) any loss or damage arising where the relevant financial instrument is not the subject of a particular credit rating assigned by MOODY'S.
To the extent permitted by law, MOODY'S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability for any direct or compensatory losses or damages caused to any person or entity, including but not limited to by any negligence (but excluding fraud, willful misconduct or any other type of liability that, for the avoidance of doubt, by law cannot be excluded) on the part of, or any contingency within or beyond the control of, MOODY'S or any of its directors, officers, employees, agents, representatives, licensors or suppliers, arising from or in connection with the information contained herein or the use of or inability to use any such information.
NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS, COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY CREDIT RATING, ASSESSMENT, OTHER OPINION OR INFORMATION IS GIVEN OR MADE BY MOODY'S IN ANY FORM OR MANNER WHATSOEVER.
Moody's Investors Service, Inc., a wholly-owned credit rating agency subsidiary of Moody's Corporation ("MCO"), hereby discloses that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by Moody's Investors Service, Inc. have, prior to assignment of any credit rating, agreed to pay to Moody's Investors Service, Inc. for credit ratings opinions and services rendered by it fees ranging from $1,000 to approximately $2,700,000. MCO and Moody's investors Service also maintain policies and procedures to address the independence of Moody's Investors Service credit ratings and credit rating processes. Information regarding certain affiliations that may exist between directors of MCO and rated entities, and between entities who hold credit ratings from Moody's Investors Service and have also publicly reported to the SEC an ownership interest in MCO of more than 5%, is posted annually at www.moodys.com
under the heading "Investor Relations — Corporate Governance — Director and Shareholder Affiliation Policy."
Additional terms for Australia only: Any publication into Australia of this document is pursuant to the Australian Financial Services License of MOODY'S affiliate, Moody's Investors Service Pty Limited ABN 61 003 399 657AFSL 336969 and/or Moody's Analytics Australia Pty Ltd ABN 94 105 136 972 AFSL 383569 (as applicable). This document is intended to be provided only to "wholesale clients" within the meaning of section 761G of the Corporations Act 2001. By continuing to access this document from within Australia, you represent to MOODY'S that you are, or are accessing the document as a representative of, a "wholesale client" and that neither you nor the entity you represent will directly or indirectly disseminate this document or its contents to "retail clients" within the meaning of section 761G of the Corporations Act 2001. MOODY'S credit rating is an opinion as to the creditworthiness of a debt obligation of the issuer, not on the equity securities of the issuer or any form of security that is available to retail investors.
Additional terms for Japan only: Moody's Japan K.K. ("MJKK") is a wholly-owned credit rating agency subsidiary of Moody's Group Japan G.K., which is wholly-owned by Moody's Overseas Holdings Inc., a wholly-owned subsidiary of MCO. Moody's SF Japan K.K. ("MSFJ") is a wholly-owned credit rating agency subsidiary of MJKK. MSFJ is not a Nationally Recognized Statistical Rating Organization ("NRSRO"). Therefore, credit ratings assigned by MSFJ are Non-NRSRO Credit Ratings. Non-NRSRO Credit Ratings are assigned by an entity that is not a NRSRO and, consequently, the rated obligation will not qualify for certain types of treatment under U.S. laws. MJKK and MSFJ are credit rating agencies registered with the Japan Financial Services Agency and their registration numbers are FSA Commissioner (Ratings) No. 2 and 3 respectively.
MJKK or MSFJ (as applicable) hereby disclose that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by MJKK or MSFJ (as applicable) have, prior to assignment of any credit rating, agreed to pay to MJKK or MSFJ (as applicable) for credit ratings opinions and services rendered by it fees ranging from JPY125,000 to approximately JPY250,000,000.
MJKK and MSFJ also maintain policies and procedures to address Japanese regulatory requirements.