...Combined Credit Profile: Fitch Ratings considers operational and geographical ties between AEP Texas Central Co. (TCC) and AEP Texas North Co. (TNC) as fundamental factors in aligning the Issuer Default Ratings (IDRs) of both companies. Low-Risk Business Profile: TCC and TNC own and operate regulated electricity distribution and transmission networks under a cost-of-service based regulatory framework in Texas. Neither company has any exposure to commodity prices. TNC's partial interest in a power plant co-owned with an affiliate is leased to a non-affiliated company through 2027. Credit Protection Measures: TCC's and TNC's credit metrics, in terms of FFO/adjusted debt, were 8.4x and 4.6x, respectively, at the end of June 30, 2014. FFO-based fixed-charge coverage ratios for the same period were 2.6x and 4.7x, respectively. Fitch expects FFO-based leverage for TCC and TCN, over the rating horizon (2014¡2016), to be around 4.5x and 4.0x, respectively, modestly below Fitch's guidance for TCC...
