S&P rates AEP Transmission notes BBB+

S&P said it assigned a BBB+ rating to AEP Transmission Co. LLC's $700 million senior unsecured notes that are issued in two tranches due in 2026 and 2046.

The agency also said it placed the ratings on CreditWatch with positive implications.

The notes are senior unsecured obligations of AEP Transmission and are not disadvantaged by the existence of material priority obligations and liabilities at the company’s operating subsidiaries, S&P explained.

The proceeds will be used to repay $300 million of a term loan and advances from affiliates under the intercompany money pool, the agency said.

The ratings consider the generally constructive regulatory framework for electric transmission companies overseen by the Federal Energy Regulatory Commission (FERC) and somewhat smaller footprint and scale of operations, S&P said.

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