Summary
American Electric Power Company, Inc. (AEP) announced the successful completion of a public offering of 16,100,000 Equity Units on March 19, 2019, raising approximately $787 million in net proceeds after expenses. These proceeds are earmarked to support AEP's extensive capital expenditure plans, including a recently announced contracted renewables transaction. This issuance represents a significant financing event aimed at funding growth initiatives and strategic investments within the company's operational framework. The Equity Units are structured to include a purchase contract for AEP common stock and a portion of 3.40% junior subordinated notes due 2024. These notes are pledged as collateral to secure the obligation to purchase the common stock. While holders are entitled to quarterly contract adjustment payments, the company retains the right to defer these payments. The offering underscores AEP's commitment to strengthening its financial position to fund future projects and maintain its strategic trajectory in the evolving energy landscape.
Key Highlights
- 1Completed a public offering of 16,100,000 Equity Units on March 19, 2019.
- 2Net proceeds from the offering are approximately $787 million.
- 3Proceeds will be used to support overall capital expenditure plans, including contracted renewables transactions.
- 4Equity Units consist of a purchase contract for AEP common stock and a 1/20 interest in $1,000 principal amount of 3.40% junior subordinated notes due 2024.
- 5The notes are pledged as collateral to secure the obligation to purchase common stock.
- 6Holders of Equity Units receive quarterly contract adjustment payments, with a company right to defer.
- 7The offering was underwritten by Barclays Capital Inc., Morgan Stanley & Co. LLC, and Wells Fargo Securities, LLC.