8-KOther EventsExhibits & Filings

American Water Works Company, Inc. 8-K Report, Corporate Update (Aug 13, 2015)

Filed August 13, 2015For Securities:AWK

Summary

American Water Works Company, Inc. (AWK), through its wholly owned subsidiary American Water Capital Corp. (AWCC), announced the successful closing of a debt offering on August 13, 2015. The offering consisted of $225 million in 3.400% Senior Notes due 2025 and $325 million in 4.300% Senior Notes due 2045, totaling $550 million in aggregate principal amount. These new notes, along with existing 2025 notes, are fungible and carry identical terms to previously issued debt. The net proceeds of approximately $540.7 million will be used to fund capital expenditures, redeem and repay long-term debt, and repay commercial paper, supporting the company's ongoing investment in its regulated operations and financial strategy. This financing event is significant for investors as it demonstrates AWK's ability to access capital markets effectively to fund its growth and maintain a healthy balance sheet. The issuance of long-term debt at fixed interest rates provides financial stability and predictability, allowing the company to execute its infrastructure improvement plans and pursue strategic initiatives. The company's CFO, Linda G. Sullivan, signed off on the report, underscoring the official nature of this financial transaction.

Key Highlights

  • 1AWCC successfully issued $225 million of 3.400% Senior Notes due 2025 and $325 million of 4.300% Senior Notes due 2045.
  • 2Total aggregate principal amount of the new notes issued is $550 million.
  • 3The new 2025 Notes are fungible with and have identical terms to the existing 2025 Notes previously issued in 2014.
  • 4Net proceeds from the offering amounted to approximately $540.7 million after underwriting discounts and before offering expenses.
  • 5Proceeds are earmarked for lending to American Water and its regulated subsidiaries, debt redemptions/repayments, and commercial paper repayment.
  • 6The debt issuance was registered under the Securities Act of 1933, indicating compliance with regulatory requirements.
  • 7The offering was underwritten by a syndicate of reputable financial institutions including J.P. Morgan Securities LLC, Mitsubishi UFJ Securities (USA) Inc., U.S. Bancorp Investments, Inc., and Wells Fargo Securities LLC.

Frequently Asked Questions

The primary purpose of this debt issuance was to raise capital to lend to American Water and its regulated operating subsidiaries, to finance the redemption and repayment of certain long-term debt, and to fund the repayment of AWCC's commercial paper. This indicates a strategic move to support ongoing investments and manage the company's capital structure.

American Water Works Company, Inc., through its subsidiary AWCC, raised approximately $540.7 million in net proceeds from the offering of the new 2025 Notes and 2045 Notes, after deducting underwriting discounts and before accounting for offering expenses.

No, the new 2025 Notes have identical terms and the same CUSIP number as the previously issued 2025 Notes, making them fungible. This increases the total outstanding principal amount of the 2025 Notes to $525 million.

The new notes issued were $225 million of 3.400% Senior Notes due 2025 and $325 million of 4.300% Senior Notes due 2045.