Appalachian Power is partnering with regional and local banks to promote area economic development and help finance the company’s ongoing capital needs.
The financing partnership provides Appalachian Power, a subsidiary of American Electric Power (NYSE: AEP), access to $125 million via a three-year senior unsecured bank loan. The funds will allow the company to update its infrastructure to continue to provide safe, reliable and affordable electricity to customers.
“This financing strategy is a true win-win,” said Charles Patton, Appalachian Power president and chief operating officer. “It provides us with competitive financing terms to support our ongoing efforts to better serve our customers. And by doing business with West Virginia and Virginia banks we can help promote stronger local economies in the communities we serve. We especially thank our lead banks, Huntington Bank and SunTrust Bank, for their leadership in cementing this partnership.”
A total of 15 banks across the two states are participating in the financing agreement, including Huntington Bank, SunTrust Bank, BB&T, United Bank, City National Bank, Summit Community Bank, Ohio Valley Bank, First Sentry Bank, National Bank of Blacksburg, Logan Bank & Trust, Bank of the James, Poca Valley Bank, New Peoples Bank, First National Bank, and Bank of Mingo.
Collaborating with local banks on large-scale capital expenditures expands the financing strategies traditionally used by Appalachian Power. Funding for large capital projects previously had been limited to larger financial institutions with global portfolios and the traditional capital markets.
“Raising capital in our service territory makes perfect sense,” Patton said. “This transaction allows us to build liquidity and diversify our lender base. In the process, we’ve established new relationships with banks operating within our region who are also our customers. We look forward to continuing to build on these strong relationships with our banking partners.”
