American Electric talks $750 million $50-par equity units to yield 6.125%-6.625%, up 17.5%-22.5%

By Abigail W. Adams

Portland, Me., Aug. 11 – American Electric Power Co. Inc. plans to price $750 million, or 15 million, three-year $50-par equity units after the market close on Tuesday with price talk for a dividend of 6.125% to 6.625% and a threshold appreciation premium of 17.5% to 22.5%, according to a market source.

J.P. Morgan Securities LLC and Mizuho Securities USA Inc. are joint active bookrunners for the registered offering, which carries a greenshoe of $100 million, or 2 million units, according to a 424B5 filing with the Securities and Exchange Commission.

The equity units consist of a common stock forward purchase contract and a 1/20 ownership interest in a par of $1,000 junior subordinated debenture due 2025.

The units are non-callable. There is takeover and dividend protection.

AEP plans to apply to list the securities on the New York Stock Exchange under the symbol “AEPPrC.”

Net proceeds are expected to be $732 million and will be used to help fund the company’s capital expenditure plans, to repay debt and for other corporate purposes.

American Electric Power is a Columbus, Ohio-based energy infrastructure company.

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