AEP announces successful debt issue in Australian market

Appalachian Power Co. will issue $200 million in notes and Kentucky Power Co., $80 million. The notes are U.S. dollar obligations with a five-year term at a fixed interest rate coupon of 4.22 percent. They are insured by Ambac Assurance Corp. and are rated AAA by Standard & Poor’s and Aaa by Moody’s. ACE Trust, in turn, will issue notes at floating and fixed rates to Australian institutions. The obligations of the AEP subsidiaries are hedged at the U.S. dollar fixed rate noted above.

The proceeds will be used to retire short-term debt and to fund upcoming maturities of these subsidiaries.

“AEP is familiar with capital markets worldwide,” said Armando Pena, AEP treasurer. “This opportunity in Australia allows us to raise capital at attractive rates and to bring new investors to the company. We plan to be very active in the U.S. capital markets soon to term out our short-term debt and refinance our companies’ maturing debt issues.”

American Electric Power, an energy company with a balanced portfolio of energy assets, owns and operates more than 42,000 megawatts of generating capacity in the United States and select international markets and is the largest electricity generator in the U.S. AEP is a leading wholesale marketer of energy commodities, utilizing its energy expertise and risk management skills to make optimal use of its generation, natural gas pipeline systems, natural gas storage, coal mines and inland barge fleet. AEP is also one of the largest electric utilities in the United States, with almost 5 million customers linked to AEP’s 11-state electricity transmission and distribution grid. The company is based in Columbus, Ohio.