American Electric Power Co. Inc. on March 14 priced a $700 million offering of 14 million equity units.

Each equity unit will be issued at $50 and will consist of a contract to purchase AEP common stock in 2022 and a 0.05% undivided beneficial ownership interest in an AEP junior subordinated debenture due 2024. The debenture will be issued in the principal amount of $1,000.

Total annual distributions on the equity units will be at the rate of 6.125%. The threshold appreciation price is $99.58 per share. Holders will be required to purchase a variable number of AEP shares no later than March 15, 2022.

The company granted underwriters an option to purchase up to an additional 2.1 million equity units, or an aggregate amount of $105 million.

The company plans to use the projected $682 million net proceeds to help fund overall capital expenditure plans and to address planned equity needs in connection with its existing capital expenditure plan through 2021. The transaction is expected to close March 19, subject to customary closing conditions.

Barclays, Morgan Stanley and Wells Fargo Securities are acting as joint book-running managers of the offering.