...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. TCC has larger operations than TNC and its credit profile supports TNC's credit profile and the IDR. Declining Credit Metrics: Fitch expects TCC's and TNC's credit metrics to decline between 2015 and 2017, reflecting slowing electricity demand, the absence of bonus tax depreciation, an anticipated increase in interest rates and continued investment in the rate base with a regulatory lag. Fitch expects TCC's adjusted debt to EBITDAR and adjusted debt to FFO to be around 3.6x and 4.3x, respectively, by the end of 2017. Fitch expects TNC's adjusted debt to EBITDAR and adjusted debt to FFO to be around 4.5x and 4.9x, respectively. Ties with AEP: TCC and TNC have operational, financial and functional ties to American Electric Power Company, Inc. (AEP), the parent...
