Appalachian Power Recovery Funding LLC

Securities Offered

$1,375,500,000 Series 2026-A Senior Secured SAC Bonds, scheduled to pay principal semi-annually and sequentially in accordance with the expected sinking fund schedule.

Issuing Entity and Capital Structure

Appalachian Power Recovery Funding LLC is a special purpose limited liability company formed under Delaware law and a direct, wholly owned subsidiary of APCo, a corporation formed under Virginia law. We were formed solely to purchase and own the SAC property, to issue the SAC bonds and to perform activities incidental thereto. Please read “Appalachian Power Recovery Funding LLC, The Issuing Entity” in this prospectus.

In addition to the SAC property, our assets will include a capital investment by APCo (and not from the proceeds of the sale of the SAC bonds) in an amount equal to 0.50% of the initial principal amount of the SAC bonds (to be held in the capital subaccount). We will also have an excess funds subaccount to retain, until the next payment date, any amounts collected and remaining after all scheduled payments on the SAC bonds have been timely made.

Our Relationship With the Virginia Commission

The Virginia Commission is consulting with APCo, to the extent requested by the Virginia Commission, with respect to the structuring and pricing of the SAC bonds. Prior to the submission of the final issuance advice letter and through the period ending with the issuance of the SAC bonds, APCo will, to the extent requested by the Virginia Commission, provide the Virginia Commission or its staff with timely information so that the Virginia Commission acting for itself or through its staff can remain informed of all material aspects relating to the structuring and pricing of, and financing costs relating to, the SAC bonds and participate as directed.

Purpose of Transaction

The financing order authorizes APCo, to recover certain Virginia Commission approved securitized asset costs, through the issuance of the SAC bonds, in an aggregate principal amount not to exceed approximately $1.376 billion, equal to the sum of: (a) approximately $1.36 billion of securitized asset costs, consisting primarily of the Virginia Commission-jurisdictional area storm restoration costs incurred between January 1, 2024 and March 31, 2025, of approximately $140.6 million and the Virginia Commission-jurisdictional area share of undepreciated Amos and Mountaineer plant balances of approximately $1.2 billion, plus (b) up-front financing costs, which are estimated at approximately $11.2 million, subject to update through the issuance advice letter process, in each case net of any large customer opt-out payments.

Contact

1051 E Cary St., Suite 1100
Richmond, VA 23219
614-716-1519

Senior Secured SAC Bonds

$1,375,500,000
Appalachian Power Recovery Funding LLC
Issuing Entity
Senior Secured SAC Bonds

The total initial price to the public is $1,375,454,837.55. The total amount of the underwriting discounts and commissions is $5,502,000. The total amount of proceeds to the issuing entity before deduction of expenses (estimated to be $5,696,416) is $1,369,952,837.55. The distribution frequency is semi-annually. The first expected payment date is April 1, 2027.

Investing in the Series 2026-A Senior Secured SAC bonds involves risks. Please read “Risk Factors” beginning on page 26 to read about factors you should consider before buying the SAC bonds.

Appalachian Power Company, as “depositor”, is offering up to $1,375,500,000 aggregate principal amount of Series 2026-A Senior Secured SAC Bonds (referred to herein as the “SAC bonds”) in three tranches to be issued by Appalachian Power Recovery Funding LLC, a Delaware limited liability company (the “issuing entity”) and wholly owned subsidiary of Appalachian Power Company. Appalachian Power Company is the “seller,” the “initial servicer” and the “sponsor” with regard to the SAC bonds. The SAC bonds are senior secured obligations of the issuing entity only and will be secured by the SAC property, which includes the right to bill and collect an irrevocable, binding, nonbypassable charge, known as the “SAC charge,” paid by all existing and future State Corporation Commission of the Commonwealth of Virginia-jurisdictional area retail customers of Appalachian Power Company, irrespective of the generation provider of such retail customers, including partially exempt customers (as defined below), as discussed herein. “Virginia Commission-jurisdictional area” refers to Appalachian Power Company’s customer base in Virginia that will be subject to the SAC charges. SAC charges are required to be adjusted at least annually, with semi-annual (and, beginning 12 months prior to the scheduled final payment date of the latest maturing tranche of the SAC bonds, quarterly) or interim, as necessary, to ensure the projected recovery of amounts sufficient to provide timely payment of the scheduled principal, interest and other required amounts in connection with the SAC bonds during the next two succeeding bond payment dates and non-standard true-ups to account for updated class allocations. Credit enhancement for the SAC bonds will be provided by the true-up mechanism, as well as by funds in the general, excess funds and capital subaccounts held under the indenture governing the SAC bonds.

Each SAC bond will be entitled to interest on April 1 and October 1 of each year, beginning on April 1, 2027. The first scheduled payment date is April 1, 2027. Interest will accrue from the date of issuance and must be paid by the purchaser of the SAC bonds if the SAC bonds are delivered after that date. On each payment date, scheduled principal payments shall be paid sequentially in accordance with the expected sinking fund schedule in this prospectus, but only to the extent funds are available in the collection account after payment of certain fees and expenses and after payment of interest.

The SAC bonds represent obligations only of the issuing entity, Appalachian Power Recovery Funding LLC, and are secured only by the assets of the issuing entity, consisting principally of the SAC property and related assets to support its obligations under the SAC bonds. Please read “Description of the SAC Bonds—Security for the SAC Bonds,” and “Description of the SAC Property” in this prospectus. The SAC property includes the right to impose, bill, charge, collect and receive SAC charges from Appalachian Power Company’s Virginia Commission-jurisdictional area retail customers in amounts sufficient to make timely payments on the SAC bonds, as described further in this prospectus. Appalachian Power Company and its affiliates, other than the issuing entity, are not liable for any payments on the SAC bonds. The SAC bonds do not obligate the Commonwealth of Virginia or any of its political subdivisions, agencies, or instrumentalities to levy any tax or make any appropriation for payment of the SAC bonds nor are they special obligations or indebtedness of the Commonwealth of Virginia or any of its political subdivisions, agencies or instrumentalities.

All matters relating to the structuring and pricing of the SAC bonds have been considered by Appalachian Power Company and the State Corporation Commission of the Commonwealth of Virginia (the “Virginia Commission”), acting through its financial advisor.

Neither the U.S. Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

The underwriters expect to deliver the SAC bonds through the book-entry facilities of The Depository Trust Company for the accounts of its participants including Clearstream Banking S.A. (“Clearstream”) and Euroclear Bank SA/NV, as operator of the Euroclear System (“Euroclear”) against payment on or about May 27, 2026. There currently is no secondary market for the SAC bonds, and we cannot assure you that one will develop.

As provided in § 56-249.8 of the Code of Virginia (the “Securitization Law”), the Commonwealth of Virginia and its agencies, including the Virginia Commission, have pledged to and agree with holders of SAC bonds, the owners of the SAC property, and other financing parties, that the Commonwealth of Virginia and its agencies, including the Virginia Commission, will not (a) alter the provisions of the Securitization Law that (i) authorize the Virginia Commission to create an irrevocable contract right or chose in action by the issuance of the financing order, to create SAC property, and (ii) make the SAC charges imposed by the financing order irrevocable, binding, or nonbypassable charges; (b) take or permit any action that impairs or would impair the value of SAC property or the security for the SAC bonds or revises the securitized asset costs for which recovery is authorized; or (c) in any way impair the rights and remedies of the holders of SAC bonds, assignees, or other financing parties, as further described in the Securitization Law. The Virginia Commission’s obligations relating to the SAC bonds, including the true-up adjustment mechanism, are direct, explicit, irrevocable and unconditional upon issuance of the SAC bonds, and are legally enforceable against the Virginia Commission, which is a United States public sector entity, in accordance with Virginia law.

Ratings Assigned

Ratings assigned to Appalachian Power Recovery Funding LLC's securitization bonds and the debt issued by the Servicer

Issuer: Appalachian Power Recovery Funding LLC
Instrument: Senior Secured SAC Bonds
Moody's Rating: Aaa
S&P Rating: AAA

Servicer: Appalachian Power Company
Instrument: Senior Unsecured Debt
Moody's Rating: Baa1
Moody's Outlook: Negative
S&P Rating: BBB+
S&P Outlook: Stable