AEP ANNOUNCES REMARKETING OF $805 MILLION IN AGGREGATE PRINCIPAL AMOUNT OF DEBT UNDERLYING ITS EQUITY UNITS
American Electric Power (AEP) announced the successful remarketing of $805 million in Junior Subordinated Debentures due 2024, transitioning from 3.40% to 2.031% interest. The remarketing, effective January 6, 2022, pertains to Original Debentures issued in March 2019 as part of AEP's Equity Units. Proceeds will fund a portfolio of treasury securities maturing March 2022. AEP will not receive any funds from this transaction. This plan aligns with AEP's sustainability goals, targeting net-zero emissions by 2050.
- Remarketing of $805 million in Junior Subordinated Debentures reflects favorable market conditions.
- Reduced interest rate from 3.40% to 2.031% may reduce overall financial costs for AEP.
- None.
COLUMBUS, Ohio, Jan. 4, 2022 /PRNewswire/ -- American Electric Power (Nasdaq: AEP) announced today that it has successfully remarketed its
The Original Debentures are being remarketed into
AEP conducted the remarketing on behalf of holders of the Equity Units and will not directly receive any proceeds from the issuance and sale of the Remarketed Debentures. The proceeds from the issuance and sale of the Remarketed Debentures will be used to purchase a portfolio of treasury securities maturing on March 10, 2022. AEP expects that a portion of the funds generated upon maturity of the portfolio will be used on March 15, 2022, to settle the purchase contracts it entered into as a part of the Equity Units.
The remarketing is being made pursuant to an effective shelf registration statement of AEP that has been filed with the U.S. Securities and Exchange Commission (SEC). This press 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 offering of debentures in connection with the remarketing may only be made by means of a prospectus and related prospectus supplement, copies of which may be obtained at no cost by visiting EDGAR on the SEC's website at www.sec.gov or by contacting Barclays Capital Inc., c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717, 1-888-603-5847 or barclaysprospectus@broadridge.com, or Wells Fargo Securities, LLC, 608 2nd Avenue South, Suite 1000, Minneapolis, MN 55402, Attention: WFS Customer Service, 1-800-645-3751 or wfscustomerservice@wellsfargo.com.
American Electric Power, based in Columbus, Ohio, is powering a cleaner, brighter energy future for its customers and communities. AEP's approximately 16,700 employees operate and maintain the nation's largest electricity transmission system and more than 224,000 miles of distribution lines to safely deliver reliable and affordable power to 5.5 million regulated customers in 11 states. AEP also is one of the nation's largest electricity producers with approximately 31,000 megawatts of diverse generating capacity, including more than 5,900 megawatts of renewable energy. The company's plans include growing its renewable generation portfolio to approximately
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; decreased demand for electricity; 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; the availability of fuel and necessary generating capacity and the performance of AEP's generating plants; 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 generation units that may be retired before the end of their previously projected useful lives; volatility and changes in markets for 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, OPEB, 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, naturally occurring and human-caused fires, cyber security threats and other catastrophic events.
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SOURCE American Electric Power
FAQ
What is the significance of AEP's remarketing of Junior Subordinated Debentures?
When will the new Junior Subordinated Debentures mature?
What is the new interest rate for AEP's Remarketed Debentures?
How will the proceeds from the remarketing be used?
Does AEP receive funds from the remarketing of the debentures?
