Summary
American Electric Power Company, Inc. (AEP) has completed a remarketing of $850 million of its 1.30% Junior Subordinated Debentures due 2025. These debentures were originally part of Equity Units issued in August 2020. The remarketing has resulted in these debentures being redesignated as 5.699% Junior Subordinated Notes due 2025, with a significant increase in the annual interest rate from 1.30% to 5.699%. Importantly, AEP did not directly receive proceeds from this remarketing. Instead, the funds generated were used to purchase treasury securities that mature in August 2023. AEP anticipates using a portion of these matured funds to settle purchase contracts associated with the original Equity Units on August 15, 2023. This transaction primarily impacts the structure and interest rate of these specific junior subordinated debentures, with the intention of facilitating settlement of outstanding equity unit obligations.
Key Highlights
- 1AEP remarketed $850 million of 1.30% Junior Subordinated Debentures due 2025.
- 2The debentures were originally issued as part of Equity Units in August 2020.
- 3The remarketing has reset the interest rate from 1.30% to 5.699% per annum.
- 4The remarketed debt is now designated as 5.699% Junior Subordinated Notes due 2025.
- 5AEP did not directly receive proceeds from the remarketing.
- 6Proceeds were used to purchase treasury securities maturing in August 2023.
- 7The transaction is intended to facilitate the settlement of purchase contracts related to the original Equity Units on August 15, 2023.