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Appalachian Power secures approval to sell up to $1.3B of promissory notes

The Virginia State Corporation Commission issued an order allowing Appalachian Power Co. to issue and sell secured and unsecured promissory notes of up to $1.3 billion, from time to time through Dec. 31, 2021.

According to a Dec. 12 filing, the promissory notes may take the form of senior notes, senior or subordinated debentures, first mortgage bonds, bank credit revolver loans or other unsecured promissory notes. The notes will mature no less than nine months or no more than 60 years from the date of issuance.

The American Electric Power Co. Inc. subsidiary plans to use the proceeds from the sale of the notes, combined with other funds available to the company, for general corporate purposes including redemption of long-term debt, repayment of short-term debt, and reimbursement of the company's treasury for expenditures for construction.

The ruling also permits Appalachian Power to enter into one or more interest rate hedging arrangements to protect against future interest rate movements. The company can utilize interest rate management techniques through entering various interest rate management agreements through Dec. 31, 2021.

The interest rate management agreements will include interest rate swaps, caps, collar, floors, options, hedging forwards or futures, or any similar products designed and used to manage and minimize interest costs, according to the filing.