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AEP Announces Pricing Of Equity Units To Fund Capital Investment Plan, Repay Debt And Other General Corporate Purposes
COLUMBUS, Ohio, Aug. 11, 2020 /PRNewswire/ -- American Electric Power (NYSE: AEP) today announced that the company has priced its offering of 15 million
About this update from American Electric Power Company, Inc.
[{"type":"text","content":"COLUMBUS, Ohio, Aug. 11, 2020 /PRNewswire/ -- American Electric Power (NYSE: AEP) today announced that the company has priced its offering of 15 million equity units or $750 million stated amount. The transaction is expected to close Aug. 14, subject to customary closing conditions.\nEach equity unit will be issued in a stated amount of $50 and will consist of a contract to purchase AEP common stock in 2023 and a 1/20 undivided beneficial ownership interest in an AEP junior subordinated debenture due 2025 to be issued in the principal amount of $1,000. Total annual distributions on the equity units will be at the rate of 6.125%, consisting of interest on the junior subordinated debentures and payments under the stock purchase contracts. The threshold appreciation price for the equity units is $99.95 per share, which represents a premium of approximately 20 percent over the reference price of $83.29. Under the purchase contract, holders will be required to purchase a variable number of shares of AEP stock no later than Aug. 15, 2023.\nAEP has granted the underwriters an option to purchase up to 2 million additional equity units, or an additional aggregate stated amount of $100 million during the 13-day period beginning on, and including, the initial issuance date of the equity units.\nAEP intends to use the net proceeds from the sale of the equity units, which are projected to be approximately $732 million (after deducting the underwriting discount and other offering expenses and without giving effect to the option described above), to help fund the company's overall capital expenditure plans, to repay debt or for other general corporate purposes. Other than this offering, there are no changes to AEP's existing financing plan.\nJ.P. Morgan Securities LLC and Mizuho Securities USA LLC are joint book-running managers for the offering. \nThe offering is made under an effective shelf registration statement filed with the U.S. Securities and Exchange Commission. This news release does not constitute an offer to sell or a solicitation of an offer to buy the securities described herein, nor shall there be any sale of these securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities law of any such jurisdiction. The offer may be made on...