--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 schedules. The true-up mechanism in the transaction is performing as expected, providing adequate credit support for all outstanding classes.
As part of Fitch's initial 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 securitization charges 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 securitizations or cause the tariff charges to exceed 20% of the total residual customer bill. Despite this severe decline in consumption, due to the true-up mechanisms, the tariff charges are able to pay all debt service by the legal final maturity date.
For further detail on the rating sensitivity analysis for Utility Tariff Bonds, please refer to Fitch's criteria titled Rating Criteria for U.S. Utility Tariff Bonds available at www.fitchratings.com.
Fitch's analysis of the Representation and Warranties (R&W) of this transaction can be found in 'AEP Texas Central Transition Funding III, LLC'. These R&W are compared to those of typical R&W for the asset class as detailed in the special report 'Representations, Warranties, and Enforcement Mechanisms in the Global Structured Finance Transactions' dated
Additional information is available at www.fitchratings.com.
--'Global Structured Finance Rating Criteria'
--'AEP Texas Central Transition Funding III - Appendix'
--'Rating Criteria for U.S. Utility Tariff Bonds'
Global Structured Finance Rating Criteria
Rating Criteria for U.S. Utility Tariff Bonds
Source: Fitch Ratings
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