March 14, 2019
AEP Announces Pricing of Equity Units
Offering addressed planned equity needs in connection with the company’s existing capital expenditure plan through 2021
COLUMBUS, Ohio, March 14, 2019 – American Electric Power (NYSE: AEP) today announced that it has priced its offering of 14 million equity units or $700 million stated amount. The transaction is expected to close March 19, 2019, subject to customary closing conditions.
Each equity unit will be issued in a stated amount of $50 and will consist of a contract to purchase AEP common stock in 2022 and a 1/20 undivided beneficial ownership interest in an AEP junior subordinated debenture due 2024 to be issued in the principal amount of $1,000. Total annual distributions on the equity units will be at the rate of 6.125 percent, consisting of interest on the junior subordinated debentures and payments under the stock purchase contracts. The threshold appreciation price for the equity units is $99.58 per share, which represents a premium of approximately 20 percent over the reference price. Under the purchase contract, holders will be required to purchase a variable number of shares of AEP stock no later than March 15, 2022.
AEP has granted the underwriters an option to purchase during the 13-day period beginning on, and including, the initial issuance date of the equity units up to 2.1 million additional equity units, or an additional aggregate stated amount of $105 million.
AEP intends to use the net proceeds from the sale of the equity units, which are projected to be $682 million (after deducting the underwriting discount and other offering expenses and without giving effect to the option described above) to help fund the company’s overall capital expenditure plans, including the recently announced contracted renewables portfolio, and to address planned equity needs in connection with the company’s existing capital expenditure plans through 2021, exclusive of the dividend reinvestment plan.
Barclays, Morgan Stanley and Wells Fargo Securities are joint book-running managers for the offering.
The offering is being made under an effective shelf registration statement filed with the U.S. Securities and Exchange Commission. This news release does not constitute an offer to sell or a solicitation of an offer to buy the securities described herein, nor shall there be any sale of these securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities law of any such jurisdiction. The offer may be made only by means of a prospectus and the related prospectus supplement. Copies of these documents may be obtained by contacting Barclays Capital Inc. by calling 888-603-5847, or by mail at Barclays Capital Inc. c/o Broadridge Financial Solutions, 1155 Long Island Ave., Edgewood, New York 11717, or by email at Barclaysprospectus@broadridge.com; Morgan Stanley & Co. LLC by mail at Morgan Stanley & Co. LLC, Attention: Prospectus Department, 180 Varick Street, 2nd Floor, New York, New York 10014; or Wells Fargo Securities, LLC, 375 Park Avenue, 4th Floor, New York, New York 10152, Attention: Equity Syndicate Department, by telephone at 800-326-5897 or by email at email@example.com.
American Electric Power, based in Columbus, Ohio, is focused on building a smarter energy infrastructure and delivering new technologies and custom energy solutions to our customers. AEP’s approximately 18,000 employees operate and maintain the nation’s largest electricity transmission system and nearly 220,000 miles of distribution lines to efficiently deliver safe, reliable power to nearly 5.4 million regulated customers in 11 states. AEP also is one of the nation’s largest electricity producers with approximately 32,000 megawatts of diverse generating capacity, including more than 4,300 megawatts of renewable energy. AEP’s family of companies includes utilities AEP Ohio, AEP Texas, Appalachian Power (in Virginia and West Virginia), AEP Appalachian Power (in Tennessee), Indiana Michigan Power, Kentucky Power, Public Service Company of Oklahoma, and Southwestern Electric Power Company (in Arkansas, Louisiana, east Texas and the Texas Panhandle). AEP also owns AEP Energy, AEP Energy Partners, AEP OnSite Partners, and AEP Renewables, which provide innovative competitive energy solutions nationwide.
This report made by American Electric Power and its Registrant Subsidiaries contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934. Although AEP and each of its Registrant Subsidiaries believe that their expectations are based on reasonable assumptions, any such statements may be influenced by factors that could cause actual outcomes and results to be materially different from those projected. Among the factors that could cause actual results to differ materially from those in the forward-looking statements are: changes in economic conditions, electric market demand and demographic patterns in AEP service territories; inflationary or deflationary interest rate trends; volatility in the financial markets, particularly developments affecting the availability or cost of capital to finance new capital projects and refinance existing debt; the availability and cost of funds to finance working capital and capital needs, particularly during periods when the time lag between incurring costs and recovery is long and the costs are material; electric load and customer growth; weather conditions, including storms and drought conditions, and AEP’s ability to recover significant storm restoration costs; the cost of fuel and its transportation, the creditworthiness and performance of fuel suppliers and transporters and the cost of storing and disposing of used fuel, including coal ash and spent nuclear fuel; availability of necessary generating capacity, the performance of AEP’s generating plants and the availability of fuel; AEP’s ability to recover fuel and other energy costs through regulated or competitive electric rates; AEP’s ability to build or acquire renewable generation, transmission lines and facilities (including the ability to obtain any necessary regulatory approvals and permits) when needed at acceptable prices and terms and to recover those costs; new legislation, litigation and government regulation, including oversight of nuclear generation, energy commodity trading and new or heightened requirements for reduced emissions of sulfur, nitrogen, mercury, carbon, soot or particulate matter and other substances that could impact the continued operation, cost recovery, and/or profitability of AEP’s generation plants and related assets; evolving public perception of the risks associated with fuels used before, during and after the generation of electricity, including nuclear fuel; timing and resolution of pending and future rate cases, negotiations and other regulatory decisions, including rate or other recovery of new investments in generation, distribution and transmission service and environmental compliance; resolution of litigation; AEP’s ability to constrain operation and maintenance costs; prices and demand for power generated and sold at wholesale; changes in technology, particularly with respect to energy storage and new, developing, alternative or distributed sources of generation; AEP’s ability to recover through rates any remaining unrecovered investment in generating units that may be retired before the end of their previously projected useful lives; volatility and changes in markets for capacity and electricity, coal, and other energy-related commodities, particularly changes in the price of natural gas; changes in utility regulation and the allocation of costs within regional transmission organizations, including ERCOT, PJM and SPP; changes in the creditworthiness of the counterparties with whom AEP has contractual arrangements, including participants in the energy trading market; actions of rating agencies, including changes in the ratings of AEP debt; the impact of volatility in the capital markets on the value of the investments held by AEP’s pension, other postretirement benefit plans, captive insurance entity and nuclear decommissioning trust and the impact of such volatility on future funding requirements; accounting pronouncements periodically issued by accounting standard-setting bodies; and other risks and unforeseen events, including wars, the effects of terrorism (including increased security costs), embargoes, cyber security threats and other catastrophic events.
|MEDIA CONTACT:||ANALYSTS CONTACT:|
|Melissa McHenry||Bette Jo Rozsa|
|Director, External Communications||Managing Director, Investor Relations|
Other News Releases
July 25, 2019
AEP Reports Second-Quarter 2019 Earnings, Reaffirms Full-Year Earnings Guidance
- Second-quarter 2019 GAAP earnings of $0.93 per share
- Second-quarter 2019 operating earnings of $1.00 per share
- Investments to benefit customers support operating earnings performance
July 23, 2019
AEP Declares Quarterly Dividend on Common Stock
The Board of Directors of American Electric Power Co. today declared a regular quarterly cash dividend of 67 cents a share on the company’s common stock.
April 30, 2019
AEP Subsidiary Public Service Company of Oklahoma to Redeem Senior Notes
Public Service Company of Oklahoma, a public utility subsidiary of American Electric Power (NYSE: AEP), announced that on June 1, 2019, it will redeem the entire outstanding $250 million principal amount of its 5.15% Senior Notes, Series H, due 2019.