AEP plans USD-700m equity offering to back renewables plan

The Trent Mesa wind farm in Texas. Photo: Business Wire.

March 14 (Renewables Now) - US utility American Electric Power Company Inc (NYSE:AEP) is seeking to raise USD 682 million (EUR 601.9m) net from the sale of equity units to support capital expenditure, including for renewables.

More specifically, the proceeds from the offering will go to fund AEP’s overall capital expenditures and for planned equity needs related to its existing capital expenditure plans through 2021.

The utility said in November 2018 it would spend USD 2.7 billion for new renewable power generation between 2019 and 2023, including about USD 2.2 billion for competitive, contracted renewable projects. The company’s portfolio currently includes 32 GW of generating capacity, including 4.3 GW of renewables.

AEP, which last month agreed to acquire Sempra Energy’s (NYSE:SRE) renewables business and its 724-MW portfolio of wind and battery storage capacity, will issue around 14 million equity units with a stated amount of USD 50 each. An equity unit will entitle to the purchase of AEP common stock in 2020 and to a 1/20 undivided beneficial ownership interest in the utility’s junior subordinated debenture due 2024.

The underwriters of the offering will be able to buy an additional 2.1 million equity units to cover over-allotments. This will be equal to around USD 105 million of stated amount, further lifting proceeds from the issuance.

Barclays, Morgan Stanley and Wells Fargo Securities will act as joint book-running managers of the deal.

(USD 1.0 = EUR 0.883)

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Veselina Petrova is one of Renewables Now's most experienced green energy writers. For several years she has been keeping track of game-changing events both large and small projects and across the globe.

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