Moody's cuts American Transmission, Trans-Allegheny

Moody's Investors Service said it downgraded the senior unsecured ratings for American Transmission System, Inc. to Baa2 from Baa1 and Trans-Allegheny Interstate Line Co. to Baa1 from A3.

The outlooks are stable.

American Transmission and Trans-Allegheny are regulated transmission utilities and direct subsidiaries of FirstEnergy Transmission, LLC (FET), an intermediate holding company of FirstEnergy Corp. (FE)

"The downgrades were triggered by FE's corporate decision to borrow against the future cash flows of its transmission businesses to enhance the family's liquidity position," Moody's vice president and senior analyst Scott Solomon said in a news release.

"This was achieved by having FET borrow $1.0 billion under a $1.0 billion revolving credit facility, proceeds which FET has largely loaned to its affiliates through the company's money pool."

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