Prospectus Supplement
(To Prospectus dated November 6, 2023)
$1,000,000,000
American Electric Power Company, Inc.
$400,000,000 7.050% Fixed-to-Fixed Reset Rate Junior Subordinated Debentures, Series A $600,000,000 6.950% Fixed-to-Fixed Reset Rate Junior Subordinated Debentures, Series B
This is an offering of $400,000,000 of 7.050% Fixed-to-Fixed Reset Rate Junior Subordinated Debentures, Series A ("Series A Debentures") and $600,000,000 of 6.950% Fixed-to-Fixed Reset Rate Junior Subordinated Debentures, Series B ("Series B Debentures", collectively, the "Debentures") to be issued by American Electric Power Company, Inc., a New York corporation. The Series A Debentures will bear interest (i) from and including the date of original issuance to, but excluding, December 15, 2029 at an annual rate of 7.050% and (ii) from and including December 15, 2029 during each Series A Interest Reset Period (as defined herein) at an annual rate equal to the Five-Year Treasury Rate (as defined herein) as of the most recent Series A Reset Interest Determination Date (as defined herein), plus 2.750%. The Series B Debentures will bear interest (i) from and including the date of original issuance to, but excluding, December 15, 2034 at an annual rate of 6.950% and (ii) from and including December 15, 2034 during each Series B Interest Reset Period (as defined herein) at an annual rate equal to the Five-Year Treasury Rate (as defined herein) as of the most recent Series B Reset Interest Determination Date (as defined herein), plus 2.675%. Interest on the Debentures will be payable semi-annually in arrears on June 15 and December 15 of each year beginning on December 15, 2024. The Debentures will be issued in registered form and in denominations of $2,000 and integral multiples of $1,000 in excess thereof. The Series A Debentures will mature on December 15, 2054. The Series B Debentures will mature on December 15, 2054.
So long as no event of default has occurred and is continuing, we may defer interest payments on either or both series of the Debentures on one or more occasions for up to 10 consecutive years as described in this prospectus supplement. Deferred interest payments with respect to a given series will accrue additional interest at a rate equal to the interest rate on the debentures, compounded on each interest payment date, to the extent permitted by law. We may redeem the Debentures at our option at the times and the prices described in this prospectus supplement. The Debentures are a new issue of securities with no established trading market. We do not intend to apply for listing of the Debentures on any securities exchange and cannot assure the holders that an active after-market for the Debentures will develop or be sustained or that holders of the Debentures will be able to sell them at favorable prices or at all.
Investing in the Debentures involves risks. See "Risk Factors" on page S-11 of this prospectus supplement.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus supplement or the related prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
Per Series A | Per Series B | |||||||
Debenture | Total | Debenture | Total | |||||
Public offering price (1)………………………….. | 100.000% | $ | 400,000,000 | 100.000% | $ | 600,000,000 | ||
Underwriting discount…………………………… | 1.000% | $ | 4,000,000 | 1.000% | $ | 6,000,000 | ||
Proceeds, before expenses, to American Electric | 99.000% | $ | 396,000,000 | 99.000% | $ | 594,000,000 | ||
Power Company, Inc. …………………………... |
- Plus accrued interest, if any, from June 20, 2024.
_____________________
We expect that the Debentures will be ready for delivery through The Depository Trust Company for the accounts of its participants, including Clearstream Banking S.A. and Euroclear Bank SA/NV, on or about June 20, 2024.
_____________________
Joint Book-Running Managers
Barclays | Citigroup | J.P. Morgan | MUFG | Scotiabank |
CIBC Capital | Credit Agricole CIB | Goldman Sachs & Co. | Morgan Stanley | US Bancorp |
Markets | LLC | |||
June 17, 2024 |
TABLE OF CONTENTS | |
Prospectus Supplement | |
Page | |
About this Prospectus Supplement | S-3 |
Summary Information | S-4 |
Risk Factors | S-11 |
Where You Can Find More Information | S-15 |
Use of Proceeds | S-15 |
Specific Terms of the Fixed-To-Fixed Reset Rate Junior Subordinated Debentures | S-16 |
Certain U.S. Federal Income Tax Considerations | S-27 |
Certain ERISA Considerations | S-33 |
Underwriting (Conflicts of Interest) | S-36 |
Legal Matters | S-43 |
Experts | S-43 |
Prospectus | |
Risk Factors | 2 |
The Company | 2 |
Prospectus Supplements | 2 |
Where You Can Find More Information | 3 |
Use of Proceeds | 4 |
Description of the Senior Notes | 4 |
Description of Common Stock | 9 |
Description of Preferred Stock | 10 |
Description of the Junior Subordinated Debentures | 12 |
Description of the Stock Purchase Contracts and the Stock Purchase Units | 18 |
Book-Entry System | 19 |
Plan of Distribution | 22 |
Legal Opinions | 23 |
Experts | 23 |
S-2
ABOUT THIS PROSPECTUS SUPPLEMENT
This document is in two parts. The first part is this prospectus supplement, which describes the specific terms of this offering of the Debentures and also adds to and updates information contained in the accompanying prospectus and the documents incorporated by reference in this prospectus supplement and the accompanying prospectus. The second part is the accompanying prospectus, which gives more general information, some of which does not apply to the Debentures. If the description of the Debentures varies between this prospectus supplement and the accompanying prospectus, you should rely on the information in this prospectus supplement.
You should rely only on the information contained or incorporated by reference in this prospectus supplement and in the accompanying prospectus and in any written communication from the Company or the underwriters specifying the final terms of the offering. We have not authorized any other person to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. You should assume that the information appearing in this prospectus supplement and the accompanying prospectus is accurate as of the date on their respective covers. Our business, financial condition, results of operations and prospects may have changed since those dates.
S-3
SUMMARY INFORMATION
The following information supplements, and should be read together with, the information contained in the accompanying prospectus. You should carefully read this prospectus supplement and the accompanying prospectus as well as the documents they incorporate by reference, before making an investment decision. Unless we state otherwise or the context otherwise requires, references appearing in this prospectus supplement to the "Company", "we", "us" and "our" should be read to refer to American Electric Power Company, Inc. and its subsidiaries.
American Electric Power Company, Inc.
We are one of the largest investor-owned electric public utility holding companies in the United States. Our electric utility operating companies provide generation, transmission and distribution services to more than five million retail customers in Arkansas, Indiana, Kentucky, Louisiana, Michigan, Ohio, Oklahoma, Tennessee, Texas, Virginia and West Virginia.
Our portfolio of assets include:
- Approximately 225,000 circuit miles of distribution lines that deliver electricity to 5.6 million customers;
- Approximately 40,000 circuit miles of transmission lines, including approximately 2,100 circuit miles of 765 kV lines, the backbone of the electric interconnection grid in the eastern United States; and
- Approximately 23,000 MWs of regulated owned generating capacity as of December 31, 2023, one of the largest complements of generation in the United States.
Our principal executive offices are located at 1 Riverside Plaza, Columbus, Ohio, and our telephone number is (614) 716-1000.
S-4
The Offering
The following summary contains basic information about this offering. For a more complete understanding of this offering, we encourage you to read this entire prospectus supplement, including "Specific Terms of the Fixed- To-Fixed Reset Rate Junior Subordinated Debentures," and the accompanying prospectus, including "Description of the Junior Subordinated Debentures."
Issuer | American Electric Power Company, Inc. |
Securities Offered | $400,000,000 principal amount of 7.050% Fixed-to-Fixed Reset |
Rate Junior Subordinated Debentures, Series A; and | |
$600,000,000 principal amount of 6.950% Fixed-to-Fixed Reset | |
Rate Junior Subordinated Debentures, Series B. | |
Denominations | $2,000 and integral multiples of $1,000 in excess thereof. |
Maturity | The Series A Debentures will mature on December 15, 2054; |
and the Series B Debentures will mature on December 15, 2054. | |
Interest | The Series A Debentures will bear interest (i) from and |
including the date of the original issuance to, but excluding, | |
December 15, 2029 at an annual rate of 7.050% and (ii) from | |
and including December 15, 2029 during each Series A Interest | |
Reset Period at an annual rate equal to the Five-Year Treasury | |
Rate as of the most recent Reset Interest Determination Date, | |
plus 2.750%. The Series B Debentures will bear interest (i) | |
from and including the date of the original issuance to, but | |
excluding, December 15, 2034 at an annual rate of 6.950% and | |
(ii) from and including December 15, 2034 during each Series B | |
Interest Reset Period at an annual rate equal to the Five-Year | |
Treasury Rate as of the most recent Reset Interest Determination | |
Date, plus 2.675%. | |
Ranking | The Debentures will be our unsecured junior subordinated |
obligations and will rank junior in right of payment to all of our | |
Senior Indebtedness (as defined in this prospectus supplement | |
under "Specific Terms of the Fixed-To-Fixed | |
Reset Rate Junior Subordinated Debentures-Ranking of the | |
Debentures"). As of March 31, 2024, we had approximately | |
$8.62 billion of Senior Indebtedness outstanding. | |
In addition, the Debentures are effectively subordinated to all | |
existing and future indebtedness and other liabilities, including | |
trade payables debt and preferred stock, if any, incurred or | |
issued by our subsidiaries. As of March 31, 2024, the total long- | |
term indebtedness of our subsidiaries was approximately $33.37 | |
billion (including securities due within one year); this amount | |
does not include other liabilities. | |
S-5 |
Optional Redemption | The Company may redeem the Series A Debentures at its option |
before their maturity: (i) in whole or in part on one or more | |
occasions at a price equal to 100% of the principal amount of | |
the Series A Debentures being redeemed, plus accrued and | |
unpaid interest, on any day in the period commencing on the | |
date falling 90 days prior to the first Series A Reset Date and | |
ending on and including the first Series A Reset Date and, after | |
the first Series A Reset Date, on any interest payment date for | |
the Series A Debentures; (ii) in whole, but not in part, at 100% | |
of their principal amount, plus any accrued and unpaid interest | |
thereon, if certain changes in tax laws, regulations or | |
interpretations occur; or (iii) in whole, but not in part, at 102% | |
of their principal amount, plus any accrued and unpaid interest | |
thereon, if a rating agency makes certain changes in the equity | |
credit criteria for securities such as the Series A Debentures. | |
The Company may redeem the Series B Debentures at its option | |
before their maturity: (i) in whole or in part on one or more | |
occasions at a price equal to 100% of the principal amount of | |
the Series B Debentures being redeemed, plus accrued and | |
unpaid interest, on any day in the period commencing on the | |
date falling 90 days prior to the first Series B Reset Date and | |
ending on and including the first Series B Reset Date and, after | |
the first Series B Reset Date, on any interest payment date for | |
the Series B Debentures; (ii) in whole, but not in part, at 100% | |
of their principal amount, plus any accrued and unpaid interest | |
thereon, if certain changes in tax laws, regulations or | |
interpretations occur; or (iii) in whole, but not in part, at 102% | |
of their principal amount, plus any accrued and unpaid interest | |
thereon, if a rating agency makes certain changes in the equity | |
credit criteria for securities such as the Series B Debentures. | |
For a more complete description of the circumstances under and | |
the redemption prices at which the Debentures may be | |
redeemed, see "Specific Terms of the Fixed-To-Fixed Reset | |
Rate Junior Subordinated Debentures-Optional Redemption," | |
"Specific Terms of the Fixed-To-Fixed Reset Rate Junior | |
Subordinated Debentures-Right to Redeem Upon a Tax Event" | |
and "Specific Terms of the Fixed-To-Fixed Reset Rate Junior | |
Subordinated Debentures-Right to Redeem Upon a Rating | |
Agency Event," in this prospectus supplement. |
S-6
Option to Defer Interest Payments | So long as no event of default has occurred and is continuing |
with respect to the applicable series of Debentures, we have the | |
option to defer interest payments on the applicable Debentures, | |
from time to time, for one or more periods (each, an "Optional | |
Deferral Period") of up to 10 consecutive years (each period, | |
commencing on the date that the first such interest payment | |
would otherwise have been made on the applicable series, a | |
Series A Optional Deferral Period or a Series B Optional | |
Deferral Period). In other words, we may declare at our | |
discretion up to a 10-year interest payment moratorium on the | |
applicable Debentures and may choose to do that on more than | |
one occasion. We may not defer payments beyond the | |
redemption date or the maturity date of the Debentures, and we | |
may not begin a new Optional Deferral Period for the applicable | |
Debentures until we have paid all accrued interest on the | |
applicable Debentures from any previous Optional Deferral | |
Periods. Any deferred interest will accrue additional interest at a | |
rate equal to the interest rate on the then applicable series of | |
Debentures to the extent permitted by law. Once all accrued and | |
unpaid interest on the applicable Debentures has been paid, we | |
can begin a new Optional Deferral Period. We, however, have | |
no current intention of deferring interest payments on the | |
Debentures. See "Specific Terms of the Fixed-To-Fixed Reset | |
Rate Junior Subordinated Debentures-Option to Defer Interest | |
Payments" in this prospectus supplement. | |
Certain Limitations During an Optional | During a Series A Optional Deferral Period or a Series B |
Deferral Period | Optional Deferral Period, we will not, and will not permit any of |
our majority-owned subsidiaries to: (i) declare or pay any | |
dividends or distributions, or redeem, purchase, acquire or make | |
a liquidation payment, on any shares of capital stock of | |
American Electric Power Company, Inc.; (ii) make any payment | |
of principal of, or interest or premium, if any, on or repay, | |
purchase or redeem any of our debt securities that rank upon our | |
liquidation on a parity with or junior to the Debentures; or (iii) | |
make any payments with respect to any guarantee by us of debt | |
securities if such guarantee ranks upon liquidation on a parity | |
with or junior to the Debentures, subject to certain exceptions. | |
See "Specific Terms of the Fixed-To-Fixed Reset Rate Junior | |
Subordinated Debentures-Option to Defer Interest Payments" | |
in this prospectus supplement. |
S-7
Events of Default
U.S. Federal Income Tax Considerations
See "Description of the Junior Subordinated Debentures- Events of Default" in the accompanying prospectus.
A valid extension of the interest payment rate period by the Company as contemplated in the Subordinated Indenture shall not constitute a default in the payment of interest giving rise to an "Event of Default" under the accompanying prospectus.
In connection with the issuance of the Debentures, Simpson Thacher & Bartlett LLP, special tax counsel to the Company, will render its opinion that, while the matter is not completely free from doubt, under applicable law as of the issue date of the Debentures, the Debentures will be properly characterized as indebtedness for U.S. federal income tax purposes. This opinion is subject to certain customary assumptions and limitations. See "Certain U.S. Federal Income Tax Considerations" in this prospectus supplement.
We agree, and by acquiring an interest in a Debenture each holder and beneficial owner of a Debenture agrees, to treat the Debentures as indebtedness for U.S. federal, state and local tax purposes.
S-8
If we defer interest payments on either series of the Debentures | |
for one or more Optional Deferral Periods, the Debentures of | |
such series would be treated as reissued with original issue | |
discount ("OID") at the time of such deferral, and all stated | |
interest on such Debentures due after such deferral would be | |
treated as OID. In such case, if you are a U.S. holder (as defined | |
under "Certain U.S. Federal Income Tax Considerations" in this | |
prospectus supplement) that owns such Debentures, you will be | |
required to include such OID in taxable income (as ordinary | |
income) as it accrues, using a constant yield method, regardless | |
of your regular method of accounting for U.S. federal income | |
tax purposes and in advance of the receipt of the cash to which | |
such OID is attributable. | |
If you sell or otherwise dispose of a Debenture before the record | |
date for the payment of interest at the end of an Optional | |
Deferral Period, you will not receive such interest. Instead, the | |
accrued interest will be paid to the holder of record on the | |
record date regardless of who the holder of record may have | |
been on any other date during the Optional Deferral Period. | |
Moreover, if you are a U.S. holder, the accrued OID will be | |
added to your adjusted tax basis in the Debenture but may not | |
be reflected in the amount you realize on the sale or other | |
disposition. To the extent the amount realized on a sale or other | |
taxable disposition of a Debenture is less than your adjusted tax | |
basis, you will generally recognize a capital loss for U.S. | |
federal income tax purposes. The deductibility of capital losses | |
is subject to limitations. See "Certain U.S. Federal Income Tax | |
Considerations-Tax Consequences to U.S. Holders-Sale, | |
Exchange, Retirement or Other Taxable Disposition of the | |
Debentures" in this prospectus supplement. | |
Reopening of the Series | We may, without the consent of the holders of the Debentures, |
increase the principal amount of either series and issue | |
additional junior subordinated debentures of such series having | |
the same ranking, interest rate, maturity and other terms as the | |
Debentures. Any such additional junior subordinated debentures | |
of such series may, together with the Debentures of such series | |
offered hereby, constitute a single series of securities under the | |
Subordinated Indenture. | |
Use of Proceeds | The net proceeds from the sale of the Debentures will be used |
for general corporate purposes including the payment of short- | |
term indebtedness. If we do not use the net proceeds | |
immediately, we will temporarily invest them in short-term, | |
interest-bearing obligations. As of June 10, 2024, we had | |
approximately $1.73 billion in short-term indebtedness | |
outstanding. |
S-9
Conflicts of Interest | Certain of the underwriters or their affiliates may own our short- |
term indebtedness, a portion of which is expected to be | |
redeemed with the net proceeds from the sale of the Debentures. | |
See "Underwriting (Conflicts of Interest)-Conflicts of | |
Interest"). | |
Trustee | The Bank of New York Mellon Trust Company, N.A. (as |
successor to The Bank of New York). | |
Governing Law | The Debentures, and the Subordinated Indenture and |
supplemental indenture pursuant to which the Debentures will | |
be issued, will be governed by and construed in accordance with | |
the laws of the State of New York. | |
Listing | The Debentures are a new issue of securities with no established |
trading market. We do not intend to apply for listing of the | |
Debentures on any securities exchange and cannot assure | |
holders that an active after-market for the Debentures will | |
develop or be sustained or that holders of the Debentures will be | |
able to sell them at a favorable price or at all. |
S-10
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AEP - American Electric Power Company Inc. published this content on 20 June 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 20 June 2024 19:08:07 UTC.