Summary
American Electric Power Company, Inc. (AEP) filed an 8-K on February 14, 2013, reporting significant updates to its credit facilities. The company entered into a $1.75 billion Amended and Restated Credit Agreement with Barclays Bank PLC as Administrative Agent, which amends and restates a prior agreement from July 2011. Concurrently, AEP also executed a $1.75 billion Second Amended and Restated Credit Agreement with JPMorgan Chase Bank, N.A. as Administrative Agent, also amending a previous agreement from July 2011. In addition to these restatements, AEP established a new $1 billion Twenty-Seven Month Term Credit Agreement with Wells Fargo Bank, National Association, as Administrative Agent. This new facility is intended to provide additional liquidity specifically for the corporate separation process of Ohio Power Company. These agreements include standard terms and covenants, such as a debt-to-total capitalization ratio not exceeding 67.5%, and outline events of default, including non-compliance with covenants or acceleration of other significant debt obligations.
Key Highlights
- 1AEP entered into a $1.75 billion Amended and Restated Credit Agreement with Barclays Bank PLC.
- 2AEP also entered into a $1.75 billion Second Amended and Restated Credit Agreement with JPMorgan Chase Bank, N.A.
- 3A new $1 billion Twenty-Seven Month Term Credit Agreement was established with Wells Fargo Bank, National Association.
- 4The new $1 billion credit facility is specifically for providing liquidity during the Ohio Power Company corporate separation.
- 5The credit agreements contain covenants, including a maximum debt-to-total capitalization ratio of 67.5%.
- 6Events of default include non-compliance with covenants or acceleration of other debt exceeding $50 million.