8-KOther EventsExhibits & Filings

American Water Works Company, Inc. 8-K Report, Corporate Update (Aug 14, 2014)

Filed August 14, 2014For Securities:AWK

Summary

American Water Works Company, Inc. (AWK), through its wholly-owned subsidiary American Water Capital Corp. (AWCC), announced the successful issuance of $500 million in aggregate principal amount of senior notes on August 14, 2014. This offering comprised $300 million of 3.400% Senior Notes due 2025 and an additional $200 million of 4.300% Senior Notes due 2042. The notes are backed by a support agreement from the parent company, AWK. This debt issuance allows AWK to secure long-term financing at favorable interest rates. The funds raised are likely to support the company's ongoing capital expenditure programs, including infrastructure improvements and system enhancements across its various utility operations. Investors can view this as a strategic move to strengthen the company's financial position and fund future growth initiatives within the regulated utility sector.

Key Highlights

  • 1AWCC issued $500 million in senior notes on August 14, 2014.
  • 2The issuance includes $300 million of 3.400% Senior Notes due 2025.
  • 3An additional $200 million of 4.300% Senior Notes due 2042 was issued.
  • 4The notes are guaranteed by the parent company, American Water Works Company, Inc., through a support agreement.
  • 5The issuance was conducted under a registration statement filed with the SEC.
  • 6Key documents related to the sale, including the Underwriting Agreement and Officers' Certificates, are filed as exhibits.
  • 7The debt was raised at fixed interest rates, providing a predictable cost of capital.

Frequently Asked Questions

The primary purpose of this debt issuance is to raise capital. These funds will likely be used for general corporate purposes, including capital expenditures for infrastructure improvements and system enhancements, which are typical for a regulated utility company like American Water Works.

The debt was issued by American Water Capital Corp. (AWCC), a wholly-owned subsidiary of American Water Works Company, Inc. (AWK). AWK provided a support agreement, meaning the parent company guarantees the notes.

The company issued two tranches of notes: $300 million of 3.400% Senior Notes due 2025 and $200 million of 4.300% Senior Notes due 2042. These are fixed-rate notes with specified maturity dates.

This issuance strengthens the company's capital structure by providing significant funding. Raising debt at these interest rates can be a cost-effective way to finance long-term assets and growth projects, potentially improving profitability over time, provided the company manages its debt levels prudently.