Moody’s rates Transource Energy A2

Moody's Investors Service said it assigned an A2 issuer rating to Transource Energy, LLC with a stable outlook.

Moody’s said the A2 rating reflects the company’s lower business risk profile as a Federal Energy Regulatory Commission (FERC) regulated transmission-only holding company. Transource operates under FERC's credit supportive regulatory framework, which provides a full forward-looking formula rate mechanism, resulting in transparent and visible cash flows, and credit metrics.

The rating also incorporates the sponsor support Transource receives from American Electric Power Co., Inc. (AEP, Baa1 stable) and Great Plains Energy, Inc. (Baa2 RUR-down), which owns 86.5% and 13.5%, respectively.

The rating factors in the anticipated large capital investment over the next two to four years as Transource completes two of its transmission projects, the agency explained.

Transource currently has two projects in service.

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