TEXT-Fitch affirms 3 classes of AEP Texas Central Transition Funding III

Tue Feb 26, 2013 5:59pm EST

Feb 26 - As part of its ongoing surveillance, Fitch Ratings has affirmed
three classes of the AEP Texas Central Transition Funding III, LLC transaction
as follows:

--Class A-1 at 'AAAsf'; Outlook Stable;
--Class A-2 at 'AAAsf'; Outlook Stable;
--Class A-3 at 'AAAsf'; Outlook Stable.

KEY RATING DRIVERS

The transaction is performing within expectations, with levels of outstanding
principal amounts in-line with the targeted amortization schedule. The true-up
mechanism is performing as expected, providing adequate credit support for all
outstanding classes.

RATING SENSITIVITY

Break the Bonds

As part of Fitch's rating sensitivity, Fitch conducted a break the bond case
which provides an alternative means by which to measure the potential effects of
rapid, significant declines in power consumption while capping the residential
TCs at 20% of the total customer bill. This analysis determines the maximum
level of forecasted energy decline that would cause a default in required
payments on the TBs or cause the TCs to exceed 20% of the total customer bill.
Despite this severe decline in consumption, due to the true-up mechanisms, the
TCs are able to pay all debt service by the legal final maturity date.

Additional information is available at 'www.fitchratings.com'. The ratings above
were solicited by, or on behalf of, the issuer, and therefore, Fitch has been
compensated for the provision of the ratings.

Applicable Criteria and Related Research:
--'Global Structured Finance Rating Criteria' dated June 6, 2012.
--'Rating Criteria for U.S. Utility Tariff Bonds' dated Dec. 20, 2012.

Applicable Criteria and Related Research
Global Structured Finance Rating Criteria
Rating Criteria for U.S. Utility Tariff Bonds
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