OREANDA-NEWS. July 28, 2015. Fitch Ratings assigns an 'AA' rating to the following series of mandatory redeemable preferred shares (MRPS) issued by ClearBridge American Energy MLP Fund Inc. (NYSE: CBA), a non-diversified, closed-end fund advised by Legg Mason Partners Fund Advisor, LLC (LMPFA) and sub-advised by ClearBridge Investments, LLC (ClearBridge). Fitch also affirms ratings on the fund's existing notes as listed at the bottom of this press release.

MRPS rated 'AA':
--Series A MRPS due July 23, 2024 in amount up to \\$10,000,000;
--Series B MRPS due July 23, 2026 in amount up to \\$40,000,000.

The MRPS issuance will increase fund leverage.

KEY RATING DRIVERS
The rating assignments and affirmations reflect:

--Sufficient pro forma asset coverage provided to the notes and MRPS as calculated per the fund's asset coverage tests;
--The structural protections afforded by mandatory collateral maintenance and de-leveraging provisions in the event of asset coverage declines;
--The legal and regulatory parameters that govern the fund's operations;
--The capabilities of ClearBridge as investment advisor.

FUND PROFILE
The fund commenced its operations on June 26, 2013. The fund seeks to provide a high level of total return, with an equal emphasis on current distributions and capital appreciation by investing primarily in energy master limited partnerships (MLPs). These companies gather, transport, process, store, distribute or market natural gas, natural gas liquids, coal, crude oil, refined petroleum products or other natural resources, or explore, develop, manage or produce such commodities.

FUND LEVERAGE
The fund's pro forma total assets incorporating the issuance of MRPS are approximately \\$1.315 billion and total leverage was \\$400 million. The leverage consisted of \\$275 million in notes, \\$75 million drawn on the fund's credit facility and \\$50 million in MRPS. The notes and credit facility are both secured and rank pari passu in the fund's capital structure.

ASSET COVERAGE
The fund's pro forma asset coverage ratios for the notes and MRPS, as calculated in accordance with the Fitch overcollaterization (OC) tests per the 'AAA' and 'AA' rating guidelines, respectively, outlined in Fitch's closed-end fund criteria, were in excess of 100%. This is the minimum asset coverage guideline required by the fund's governing documents.

The fund's pro forma asset coverage ratio for senior securities representing debt, as calculated in accordance with the Investment Company Act of 1940 (1940 Act), was in excess of 300%, which is the minimum asset coverage required by the 1940 Act at the time of issuance and the fund's governing documents.

The fund's pro forma asset coverage ratios for the notes and MRPS, as calculated in accordance with the Investment Company Act of 1940 (1940 Act), were in excess of 225%, which is the minimum asset coverage required by the fund's governing documents.

STRUCTURAL PROTECTIONS
Should any of the asset coverage tests above decline below their minimum threshold amounts (as tested on the last business day of each week), under the terms of the notes and MRPS, the fund manager is expected to cure the breach by altering the composition of the portfolio toward assets with lower discount factors (for Fitch OC Tests breaches), or by reducing leverage in a sufficient amount (for both the Fitch OC Tests and the 1940 Act test breaches) within a pre-specified time period (a maximum of 47 calendar days for the Fitch OC Tests and a longer period for the 1940 Act test).

Failure to cure an asset coverage breach as described above requires the fund to reduce leverage. The fund must deliver a notice within five business days to the note purchasers and a majority vote of note purchasers may then declare all the notes then outstanding to be immediately due and payable. The fund is also prohibited from paying out a common stock dividend if it fails to cure a breach to the notes' 300% 1940 Act asset coverage test. Fitch views this as an added incentive to cure and deleverage in a timely manner, regardless of acceleration by the notes purchasers.

MRPS JUNIOR CLAIM TO SENIOR NOTES AND CREDIT FACILITY
Upon the occurrence of a mandatory redemption event per the MRPS statement of preferences (such as a failure to cure an asset coverage breach, MRPS investors have a claim on portfolio assets junior to notes and bank borrowings but senior to any distributions to common stock holders.

THE ADVISOR
LMPFA and ClearBridge are wholly owned subsidiaries of Legg Mason, Inc., a global asset management firm with \\$699 billion in assets under management as of June 30, 2015. ClearBridge is Legg Mason, Inc.'s largest equity manager.

CONCURRENT RATING AFFIRMATIONS
Fitch affirms the following ratings at 'AAA':
--\\$55,000,000 3.25% series A senior secured notes due Oct. 15, 2018;
--\\$60,000,000 3.89% series B senior secured notes due Oct. 15, 2020;
--\\$85,000,000 4.51% series C senior secured notes due Oct. 15, 2023;
--\\$75,000,000 4.66% series D senior secured notes due Oct. 15, 2025.

RATING SENSITIVITIES
The rating is based on the terms of the notes and MRPS stipulating mandatory collateral maintenance and de-leveraging provisions in the event of asset coverage declines. Should the fund fail to cure an asset coverage breach, or the note purchasers not declare the notes due and payable upon an event of default due to an asset coverage breach, this may lengthen exposure to market value risk and cause the ratings to be lowered by Fitch.

The ratings may also be sensitive to material changes in the credit quality or market risk profile of the fund. A material adverse deviation from Fitch guidelines for any key rating driver could cause the ratings to be lowered by Fitch.

For additional information about Fitch closed-end fund ratings guidelines, please review the criteria referenced below, which can be found on Fitch's website.