Fitch Rates American Municipal Power-Ohio's $300MM Prairie State Bonds 'A'

Business Wire, May 21, 2008

NEW YORK -- Fitch Ratings has assigned an underlying 'A' rating to American Municipal Power-Ohio, Inc.'s (AMP-Ohio) $300,000,000 Prairie State Energy Campus (PSEC) project revenue bonds, series 2008 A. The 35-year fixed-rate bonds will be used by the AMP-Ohio PSEC for construction costs related to its 23.26% or 368 megawatts (mw) ownership interest in the 1600 mw Prairie State Energy Campus coal-fired plant. Fitch has also affirmed the outstanding ratings for AMP-Ohio:

--Joint Venture 5 project bonds 'A';

--Joint Venture 2 project bonds 'A-';

--Prairie State Project BANs series 2008 'F1'.

The Rating Outlook is Stable.

The underlying 'A' rating for the AMP-Ohio PSEC reflects the following:

--The project's economics relative to current market prices;

--Long-term, take-or-pay power purchase contracts;

--The contracts' 25% step-up provision to mitigate individual participant default;

--Financial stability and diversity of its 68 participants;

--AMP-Ohio's solid history of managing the power needs of a large, diverse membership, which includes 122 members; and

--Weaknesses in Ohio's economy.

Key credit drivers that could affect the rating include:

--Construction risks associated with the completion of large coal-fired generators;

--The participants' ability to support AMP-Ohio's debt at the current rating level, given manufacturing and housing weaknesses in Ohio's economy.

--AMP-Ohio's ability and commitment to maintain lines of credit sufficient to support the outstanding 2008 bond anticipation notes (BANs).

Given the magnitude of AMP-Ohio's capital plan ($4.9 billion), which includes the development of three generation projects simultaneously, Fitch will monitor management's oversight of these projects.

More information is available in Fitch's March 18 and Jan. 30 reports on AMP-Ohio regarding the credit quality of the AMP-Ohio PSEC (formerly Prairie State Project) and AMP-Ohio's overall strategy, at www.fitchratings.com.

AMP-Ohio is a non-profit wholesale power and services provider for a mix of 122 all-requirement and partial requirement member municipal electric systems - 81 in Ohio, 26 in Pennsylvania, seven in Michigan, five in Virginia, two in West Virginia, and one in Kentucky serving over 540,000 customers. AMP-Ohio also acts as project manager for groups of member electric systems participating in separately secured joint ventures that share ownership of power generation and transmission assets.

Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.