8-KOther EventsExhibits & Filings

AMERICAN ELECTRIC POWER CO INC 8-K Report, Corporate Update (Jan 6, 2022)

Filed January 6, 2022For Securities:AEP

Summary

American Electric Power Company, Inc. (AEP) announced the completion of a remarketing of its 3.40% Junior Subordinated Debentures due 2024, originally part of its Equity Units. The remarketing resulted in these debentures being redesignated as 2.031% Junior Subordinated Notes due 2024, with a reduced interest rate. This transaction was conducted on behalf of the holders of the original Equity Units and AEP did not directly receive proceeds. The proceeds from the remarketing were used to purchase treasury securities that will mature shortly before the notes' maturity. AEP anticipates using funds from these maturing securities to settle the purchase contracts associated with the original Equity Units on March 15, 2022. This action is a step towards settling obligations related to the 2019 Equity Unit issuance.

Key Highlights

  • 1AEP completed a remarketing of $805,000,000 aggregate principal amount of its 2024 Junior Subordinated Debentures.
  • 2The interest rate on these debentures was reduced from 3.40% to 2.031% per annum.
  • 3The debentures were redesignated as 2.031% Junior Subordinated Notes due 2024, maturing on March 15, 2024.
  • 4The transaction was conducted on behalf of holders of AEP's original Equity Units, and AEP did not directly receive proceeds.
  • 5Proceeds were used to purchase treasury securities maturing in March 2022.
  • 6AEP expects to use funds from maturing treasury securities to settle purchase contracts related to the original Equity Units in March 2022.

Frequently Asked Questions

The primary event is the completion of the remarketing of $805,000,000 of AEP's 3.40% Junior Subordinated Debentures due 2024, which were originally part of its Equity Units. These debentures were effectively converted into 2.031% Junior Subordinated Notes due 2024.

No, AEP did not directly receive any proceeds from this remarketing. The transaction was conducted on behalf of the holders of the original Equity Units, and the proceeds were used to purchase treasury securities.

This event relates to the settlement of AEP's obligations stemming from its 2019 Equity Unit issuance. While the interest rate on the junior subordinated debt was reduced, AEP did not receive cash directly from the remarketing. Instead, it is preparing to use funds from maturing treasury securities to settle purchase contracts with holders of the Equity Units, indicating a step towards the maturity and settlement of these specific financial instruments.

The newly remarketed 2.031% Junior Subordinated Notes due 2024 mature on March 15, 2024. AEP expects that a portion of the funds generated from the maturing treasury securities (which mature on March 10, 2022) will be used to settle the purchase contracts issued as part of the original Corporate Units on March 15, 2022.