AEP $300 million mandatory convertibles talked at 9.0-9.5% yield, up 18-22%

By Ronda Fears

Nashville, Tenn., June 3 - American Electric Power Inc. launched $400 million of four-year mandatory convertibles, talked to yield 9.0% to 9.5% with an 18% to 22% initial conversion premium. The deal is set to price Thursday via joint bookrunning lead managers Goldman Sachs & Co., JPMorgan and Salomon Smith Barney.

The Columbus, Ohio-based energy firm is also selling 16 million shares of common stock.

Salomon Smith Barney is global coordinator for both offerings.

The convertible will be non-callable.

American Electric Power shares closed Monday down $1.43 to $41.30.

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