Tear Sheet: American Electric Power Co. Inc. Announced Minority Sale In Line With S&P Global Ratings' Expectations

On Jan. 9, 2025, American Electric Power Co. Inc. (AEP) announced that it reached an agreement to sell a 19.9% noncontrolling interest in its AEP Ohio Transmission Co. Inc. and AEP Indiana Michigan Transmission Co. Inc. to a 50-50 partnership between KKR&Co. Inc. and Public Sector Pension Investment Board. The transmission companies are subsidiaries of AEP Transmission Co. LLC and account for approximately 5% of AEP?s total transmission rate base. Under the agreement, AEP will receive about $2.82 billion, which it will use to support its $54 billion five-year capital spending plan and to offset a significant portion of its $5.35 billion equity financing needs through 2029. The agreement requires regulatory approval from the Federal Energy Regulatory Commission

...Rating Component Scores Foreign currency issuer credit rating ###+/Negative/A-2 Local currency issuer credit rating ###+/Negative/A-2 Business risk Excellent Country risk Very Low Industry risk Very Low Competitive position Strong Financial risk Significant Cash flow/leverage Significant Anchor a- Diversification/portfolio effect Neutral (no impact) Capital structure Neutral (no impact) Financial policy Neutral (no impact) Liquidity Adequate (no impact) Management and governance Neutral (no impact) Comparable rating analysis Negative (-1 notch) Stand-alone credit profile ###+...

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