efc12-271_fmfwp.htm
Free Writing Prospectus
Filed Pursuant to Rule 433
Relating to Preliminary Prospectus Supplement dated March 5, 2012
and Prospectus Dated March 2, 2012
Registration Nos. 333-179092 and 333-179092-01

AEP Texas Central Transition Funding III LLC
Issuing Entity
PRICING TERM SHEET
March 7, 2012
$800,000,000
Senior Secured Transition Bonds
 
 
Structuring Bookrunner:
Morgan Stanley & Co. LLC
Joint Bookrunners:
Barclays Capital Inc. and Citigroup Global Markets Inc.
Co-Managers:
Goldman, Sachs & Co., Samuel A. Ramirez & Company, Inc., RBS Securities Inc. and Wells Fargo Securities, LLC.
   
Expected Ratings:
“AAAsf”/ “Aaa(sf)”/ “AAA(sf)” by Fitch, Moody’s and S&P, respectively.*
   
Closing Date / Settlement Date:
March 14, 2012.

 
We expect that delivery of the Senior Secured Transition Bonds (the “Bonds”) will be made to investors on or about March 14, 2012 (such settlement being referred to as “T+5”).  Under Rule 15c6-1 under the Exchange Act, trades in the secondary market are required to settle in three business days (such settlement referred to as “T+3”), unless the parties to any such trade expressly agree otherwise.  Accordingly, purchasers who wish to trade the Bonds on the date of pricing or on the next business day will be required, by virtue of the fact that the Bonds initially will settle at T+5, to specify an alternate settlement arrangement at the time of any such trade to prevent a failed settlement. Purchasers of the Bonds who wish to trade the Bonds on the date of pricing or the next business day should consult their advisors.
 
Interest Payment Dates:
June 1 and December 1 of each year, and on the final maturity date, commencing on December 1, 2012.
Applicable Time:
4:53 p.m. (ET) on March 7, 2012
Proceeds to Issuing Entity:
The total amount of proceeds to the Issuing Entity (as defined below) after underwriting discounts and commissions of $3,200,000 and before deduction of expenses (estimated to be $3,403,564) is $796,796,891.
 
 
Tranche
   
Principal Amount Offered
   
Expected Weighted Average Life (years)
 
Scheduled Final Payment Date
Final Maturity Date
 
No. of Scheduled Semi-Annual Sinking Fund Payments
   
Interest Rate
   
Initial Price to Public**
   
Underwriting Discounts and Commissions
 
  A-1     $ 307,900,000       3.00  
12/1/2017
12/1/2018
    11       0.8801 %     99.99971 %     0.40 %
  A-2     $ 180,200,000       7.00  
6/1/2020
6/1/2021
    6       1.9764 %     99.99967 %     0.40 %
  A-3     $ 311,900,000       10.76  
12/1/2024
3/1/2026
    10       2.8449 %     99.99948 %     0.40 %

 
AEP Texas Central Transition Funding III LLC (the “Issuing Entity”) and AEP Texas Central Company (“TCC”) have jointly filed a registration statement (including a prospectus and preliminary prospectus supplement) with the Securities and Exchange Commission (the “SEC”) for the offering to which this communication relates.  Before you invest, you should read the prospectus and preliminary prospectus supplement in that registration statement and other documents the Issuing Entity and TCC have filed with the SEC for more complete information about the Issuing Entity and the offering.  You may get these documents for free by visiting EDGAR on the SEC web site at www.sec.gov.  Alternatively, the Issuing Entity, Morgan Stanley & Co. LLC (the “Underwriter”) or any dealer participating in the offering will arrange to send you the prospectus and prospectus supplement if you request it by calling the Underwriter toll-free at 1-866-718-1649.
 
* A security rating is not a recommendation to buy, sell, or hold securities and should be evaluated independently of any other rating.  The rating is subject to revision or withdrawal at any time by the assigning rating organization.

** Interest on the Bonds will accrue from March 14, 2012 and must be paid by the purchaser if the Bonds are delivered after that date.
 
 
 
 
 

 
 
EXPECTED AMORTIZATION SCHEDULE

Outstanding Principal Balance
 
Semi-Annual
Payment Date
   
Tranche A-1
Balance
   
Tranche A-2
Balance
   
Tranche A-3
Balance
 
Tranche Size
    $ 307,900,000     $ 180,200,000     $ 311,900,000  
Date
                         
Closing Date
    $ 307,900,000     $ 180,200,000     $ 311,900,000  
12/1/2012
      273,166,926       180,200,000       311,900,000  
6/1/2013
      246,906,438       180,200,000       311,900,000  
12/1/2013
      214,306,486       180,200,000       311,900,000  
6/1/2014
      187,958,345       180,200,000       311,900,000  
12/1/2014
      154,927,629       180,200,000       311,900,000  
6/1/2015
      128,259,684       180,200,000       311,900,000  
12/1/2015
      95,024,772       180,200,000       311,900,000  
6/1/2016
      68,087,949       180,200,000       311,900,000  
12/1/2016
      34,593,527       180,200,000       311,900,000  
6/1/2017
      7,387,936       180,200,000       311,900,000  
12/1/2017
      -       153,829,243       311,900,000  
6/1/2018
      -       126,199,853       311,900,000  
12/1/2018
      -       91,885,995       311,900,000  
6/1/2019
      -       63,644,740       311,900,000  
12/1/2019
      -       28,712,454       311,900,000  
6/1/2020
      -       -       311,755,743  
12/1/2020
      -       -       276,183,643  
6/1/2021
      -       -       246,531,642  
12/1/2021
      -       -       210,035,268  
6/1/2022
      -       -       179,443,959  
12/1/2022
      -       -       141,991,676  
6/1/2023
      -       -       110,431,733  
12/1/2023
      -       -       71,998,534  
6/1/2024
      -       -       39,443,320  
12/1/2024
      -       -       -  
 
 
 
 
 
2

 
 
EXPECTED SINKING FUND SCHEDULE*

Semi-Annual
Payment Date
   
Tranche A-1
Balance
   
Tranche A-2
Balance
   
Tranche A-3
Balance
 
Tranche Size
    $ 307,900,000     $ 180,200,000     $ 311,900,000  
Date
                         
12/1/2012
      34,733,074       -       -  
6/1/2013
      26,260,488       -       -  
12/1/2013
      32,599,952       -       -  
6/1/2014
      26,348,140       -       -  
12/1/2014
      33,030,716       -       -  
6/1/2015
      26,667,946       -       -  
12/1/2015
      33,234,912       -       -  
6/1/2016
      26,936,823       -       -  
12/1/2016
      33,494,422       -       -  
6/1/2017
      27,205,591       -       -  
12/1/2017
      7,387,936       26,370,757       -  
6/1/2018
      -       27,629,390       -  
12/1/2018
      -       34,313,858       -  
6/1/2019
      -       28,241,255       -  
12/1/2019
      -       34,932,286       -  
6/1/2020
      -       28,712,454       144,257  
12/1/2020
      -       -       35,572,100  
6/1/2021
      -       -       29,652,001  
12/1/2021
      -       -       36,496,374  
6/1/2022
      -       -       30,591,308  
12/1/2022
      -       -       37,452,283  
6/1/2023
      -       -       31,559,943  
12/1/2023
      -       -       38,433,199  
6/1/2024
      -       -       32,555,215  
12/1/2024
      -       -       39,443,320  
Total Payments
    $ 307,900,000     $ 180,200,000     $ 311,900,000  
 
 

*           May not total due to rounding.