Moody’s turns AEP Texas to negative

Moody's Investors Service changed its outlook on AEP Texas Inc. to negative from stable.

The agency affirmed its Baa2 senior and issuer rating.

Approximately $5 billion of debt is affected by the revision.

AEP Texas' negative outlook reflects the potential that its rating could be downgraded should the outcome of its currently pending rate case be unfavorable or if we expect its ratio of cash flow from operations pre-working capital to debt will be below 12% for an extended period.

The outlook could come back to stable if there is a constructive outcome in the company’s pending rate case and if it is able to maintain that ratio above 12%.

AEP is a wholly owned subsidiary of American Electric Power Co., Inc.

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