Bulletin: American Electric Power Co. Inc.'s Impairment Of Unregulated Coal-Fired Units Does Not Affect Ratings

NEW YORK (S&P Global Ratings) Nov. 2, 2016--S&P Global Ratings said today that American Electric Power Co. Inc.'s (BBB+/Watch Pos/A-2) (AEP) impairment of four unregulated coal-fired units in Ohio is a neutral development and does not currently affect the ratings on AEP. The $2.3 billion pre-tax impairment was triggered because, separately, AEP is in the process of selling about 5,200 MW of additional merchant generation capacity to a third party and also reflects the low expected contribution to cash flow from the assets that were impaired. The pending sale of the merchant generation capacity is expected to close in first-quarter 2017 and is part of AEP's effort to reduce its merchant generation exposure.

...NEW YORK (S&P Global Ratings) Nov. 2, 2016--S&P Global Ratings said today that American Electric Power Co. Inc.'s (###+/Watch Pos/A-2) (AEP) impairment of four unregulated coal-fired units in Ohio is a neutral development and does not currently affect the ratings on AEP. The $2.3 billion pre-tax impairment was triggered because, separately, AEP is in the process of selling about 5,200 MW of additional merchant generation capacity to a third party and also reflects the low expected contribution to cash flow from the assets that were impaired. The pending sale of the merchant generation capacity is expected to close in first-quarter 2017 and is part of AEP's effort to reduce its merchant generation exposure. Only a rating committee may determine a rating action and this report does not constitute a rating action....

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