Aep Texas Central (ATXCH) FWP Free writing prospectus

Free Writing Prospectus

Filed Pursuant to Rule 433

Relating to Preliminary Prospectus Supplement dated March 5, 2012

and Prospectus Dated March 2, 2012

Registration Nos. 333-179092 and 333-179092-01

AEP Texas Central Transition Funding III LLC

Issuing Entity

PRICING TERM SHEET

March 7, 2012

$800,000,000

Senior Secured Transition Bonds

Structuring Bookrunner:	Morgan Stanley & Co. LLC
Joint Bookrunners:	Barclays Capital Inc. and Citigroup Global Markets Inc.
Co-Managers:	Goldman, Sachs & Co., Samuel A. Ramirez & Company, Inc., RBS Securities Inc. and Wells Fargo Securities, LLC.
Expected Ratings:	“AAAsf”/ “Aaa(sf)”/ “AAA(sf)” by Fitch, Moody’s and S&P, respectively.*
Closing Date / Settlement Date:	March 14, 2012.

We expect that delivery of the Senior Secured Transition Bonds (the “Bonds”) will be made to investors on or about March 14, 2012 (such settlement being referred to as “T+5”).  Under Rule 15c6-1 under the Exchange Act, trades in the secondary market are required to settle in three business days (such settlement referred to as “T+3”), unless the parties to any such trade expressly agree otherwise.  Accordingly, purchasers who wish to trade the Bonds on the date of pricing or on the next business day will be required, by virtue of the fact that the Bonds initially will settle at T+5, to specify an alternate settlement arrangement at the time of any such trade to prevent a failed settlement. Purchasers of the Bonds who wish to trade the Bonds on the date of pricing or the next business day should consult their advisors.

Interest Payment Dates:	June 1 and December 1 of each year, and on the final maturity date, commencing on December 1, 2012.
Applicable Time:	4:53 p.m. (ET) on March 7, 2012
Proceeds to Issuing Entity:	The total amount of proceeds to the Issuing Entity (as defined below) after underwriting discounts and commissions of $3,200,000 and before deduction of expenses (estimated to be $3,403,564) is $796,796,891.

Tranche		Principal Amount Offered		Expected Weighted Average Life (years)		Scheduled Final Payment Date	Final Maturity Date	No. of Scheduled Semi-Annual Sinking Fund Payments		Interest Rate			Initial Price to Public**			Underwriting Discounts and Commissions
	A-1	$	307,900,000		3.00	12/1/2017	12/1/2018		11		0.8801	%		99.99971	%		0.40	%
	A-2	$	180,200,000		7.00	6/1/2020	6/1/2021		6		1.9764	%		99.99967	%		0.40	%
	A-3	$	311,900,000		10.76	12/1/2024	3/1/2026		10		2.8449	%		99.99948	%		0.40	%

AEP Texas Central Transition Funding III LLC (the “Issuing Entity”) and AEP Texas Central Company (“TCC”) have jointly filed a registration statement (including a prospectus and preliminary prospectus supplement) with the Securities and Exchange Commission (the “SEC”) for the offering to which this communication relates.  Before you invest, you should read the prospectus and preliminary prospectus supplement in that registration statement and other documents the Issuing Entity and TCC have filed with the SEC for more complete information about the Issuing Entity and the offering.  You may get these documents for free by visiting EDGAR on the SEC web site at www.sec.gov.  Alternatively, the Issuing Entity, Morgan Stanley & Co. LLC (the “Underwriter”) or any dealer participating in the offering will arrange to send you the prospectus and prospectus supplement if you request it by calling the Underwriter toll-free at 1-866-718-1649.

* A security rating is not a recommendation to buy, sell, or hold securities and should be evaluated independently of any other rating.  The rating is subject to revision or withdrawal at any time by the assigning rating organization.

** Interest on the Bonds will accrue from March 14, 2012 and must be paid by the purchaser if the Bonds are delivered after that date.

EXPECTED AMORTIZATION SCHEDULE

Outstanding Principal Balance

Semi-Annual Payment Date	Tranche A-1 Balance		Tranche A-2 Balance		Tranche A-3 Balance
Tranche Size	$	307,900,000	$	180,200,000	$	311,900,000
Date
Closing Date	$	307,900,000	$	180,200,000	$	311,900,000
12/1/2012		273,166,926		180,200,000		311,900,000
6/1/2013		246,906,438		180,200,000		311,900,000
12/1/2013		214,306,486		180,200,000		311,900,000
6/1/2014		187,958,345		180,200,000		311,900,000
12/1/2014		154,927,629		180,200,000		311,900,000
6/1/2015		128,259,684		180,200,000		311,900,000
12/1/2015		95,024,772		180,200,000		311,900,000
6/1/2016		68,087,949		180,200,000		311,900,000
12/1/2016		34,593,527		180,200,000		311,900,000
6/1/2017		7,387,936		180,200,000		311,900,000
12/1/2017		-		153,829,243		311,900,000
6/1/2018		-		126,199,853		311,900,000
12/1/2018		-		91,885,995		311,900,000
6/1/2019		-		63,644,740		311,900,000
12/1/2019		-		28,712,454		311,900,000
6/1/2020		-		-		311,755,743
12/1/2020		-		-		276,183,643
6/1/2021		-		-		246,531,642
12/1/2021		-		-		210,035,268
6/1/2022		-		-		179,443,959
12/1/2022		-		-		141,991,676
6/1/2023		-		-		110,431,733
12/1/2023		-		-		71,998,534
6/1/2024		-		-		39,443,320
12/1/2024		-		-		-

2

EXPECTED SINKING FUND SCHEDULE*

Semi-Annual Payment Date	Tranche A-1 Balance		Tranche A-2 Balance		Tranche A-3 Balance
Tranche Size	$	307,900,000	$	180,200,000	$	311,900,000
Date
12/1/2012		34,733,074		-		-
6/1/2013		26,260,488		-		-
12/1/2013		32,599,952		-		-
6/1/2014		26,348,140		-		-
12/1/2014		33,030,716		-		-
6/1/2015		26,667,946		-		-
12/1/2015		33,234,912		-		-
6/1/2016		26,936,823		-		-
12/1/2016		33,494,422		-		-
6/1/2017		27,205,591		-		-
12/1/2017		7,387,936		26,370,757		-
6/1/2018		-		27,629,390		-
12/1/2018		-		34,313,858		-
6/1/2019		-		28,241,255		-
12/1/2019		-		34,932,286		-
6/1/2020		-		28,712,454		144,257
12/1/2020		-		-		35,572,100
6/1/2021		-		-		29,652,001
12/1/2021		-		-		36,496,374
6/1/2022		-		-		30,591,308
12/1/2022		-		-		37,452,283
6/1/2023		-		-		31,559,943
12/1/2023		-		-		38,433,199
6/1/2024		-		-		32,555,215
12/1/2024		-		-		39,443,320
Total Payments	$	307,900,000	$	180,200,000	$	311,900,000

*           May not total due to rounding.