AEP talks $700 million three-year equity units to yield 6.125%-6.625%, up 17.5%-22.5%

By Abigail W. Adams

Portland, Me., March 13 – American Electric Power plans to price $700 million of $50-par mandatory equity units after the market close on Thursday with price talk for a coupon of 6.125% to 6.625% and an initial conversion premium of 17.5% to 22.5%, according to a market source.

Barclays, Morgan Stanley & Co. LLC and Wells Fargo Securities LLC are joint bookrunners for the registered offering, which carries a greenshoe of $105 million.

The equity units will consist of a contract to purchase common stock and a 1/20 interest in a $1,000-par junior subordinated debenture due 2024, according to a company press release.

Net proceeds are expected to be $682 million. Proceeds will be used for the company’s capital expenditure plan, including its renewable energy program.

American Electric Power is a Columbus, Ohio-based electric utility.

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