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American Electric Power remarkets $850 million of 1.3% junior subordinated debentures due 2025
By Mary-Katherine Stinson
Lexington, Ky., May 31 – American Electric Power Co., Inc. is remarketing $850 million of 1.3% junior subordinated debentures due Aug. 15, 2025, according to a 424B5 filed with the Securities and Exchange Commission.
The notes are non-callable.
The debentures were originally issued in August 2020 as components of equity units, initially consisting of corporate units. Each corporate unit initially consisted of both a purchase contract obligating the holder to purchase common stock and a 1/20th undivided beneficial interest in a $1,000 principal amount of a debenture. The debentures are being remarketed on behalf of the corporate unitholders.
The agreement requires that the debentures be remarketed at a public offering price that will result in sufficient proceeds to purchase the Treasury portfolio at the Treasury portfolio purchase price plus the remarketing fee. The Treasury portfolio consists of U.S. Treasury securities that mature before or on Aug. 14, 2023 that are the same principal amount of the debentures that make up a component of the corporate units and U.S. Treasury securities that mature on or before Aug. 14, 2023 in an amount that equals the interest payment that would be due on Aug. 15, 2023 that would have been a component of the corporate units if there was no remarketing and no reset of the interest rate.
J.P. Morgan Securities LLC and Mizuho Securities USA LLC are the remarketing agents.
Bank of New York Mellon Trust Co., NA is the trustee.
American Electric is using in-house counsel and Simpson Thacher & Bartlett LLP. The agents are being advised by Hunton Andrews Kurth LLP.
Proceeds will be used to purchase the Treasury portfolio, a portion of which will then be pledged to secure the purchase contract obligations of the corporate unitholders.
American Electric Power is a Columbus, Ohio-based electricity provider.
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