Filed pursuant to Rule 424(b)(5)
Registration No. 333-249918
The information in this preliminary prospectus supplement is not
complete and may be changed. Neither this preliminary prospectus
supplement nor the accompanying prospectus is an offer to sell the
securities and neither is soliciting any offer to buy the
securities in any jurisdiction where the offer or sale is not
permitted.
Subject to Completion, Preliminary Prospectus Supplement dated
January 4, 2022
Prospectus Supplement
(To Prospectus dated November 6, 2020)
American Electric Power Company, Inc.
$805,000,000
% Junior Subordinated Debentures due 2024
This is a remarketing of $805,000,000 aggregate principal amount
of our 3.40% Junior Subordinated Debentures due 2024 (the
“Debentures”), that were originally issued by American Electric
Power Company, Inc., a New York corporation, in March 2019 as
components of Equity Units (initially consisting of Corporate
Units) sold by American Electric Power Company, Inc. The Debentures
are being remarketed pursuant to the terms of the Corporate Units.
This remarketing is on behalf of holders of the Corporate
Units.
We will pay interest semi-annually on the Debentures on March 15
and September 15 of each year, until maturity.
The interest rate on the Debentures will be reset to
% per year, effective on and after January
, 2022.
The first interest payment date following this remarketing will be
March 15, 2022 and such interest payment will include interest
accrued at an annual rate of
% from, and including January
, 2022 to, but excluding, March 15, 2022.
Following the first interest payment date described above, interest
on each Debenture will accrue from and including the last interest
payment date on which we have paid, or duly provided for the
payment of, interest on that Debenture to, but excluding, the next
succeeding interest payment date.
The Debentures will mature on March 15, 2024.
Investing in the Debentures involves risks. See “Risk Factors” on
page S-9 of this prospectus supplement.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these
securities or determined if this prospectus supplement or the
related prospectus is truthful or complete. Any representation to
the contrary is a criminal offense.
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Per
Debenture |
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Total |
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Price to Public(1)
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% |
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$ |
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Remarketing Fee to Remarketing Agents(2)
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Net Proceeds(3)
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(1)
Plus accrued interest from January , 2022
(2)
Equals
% of the Treasury portfolio purchase price.
(3)
We
will not receive any proceeds from the remarketing. See “Use of
Proceeds” in this prospectus supplement.
_____________________
The remarketing agents expect to deliver the Debentures to
investors in book-entry only form through The Depository Trust
Company, Euroclear Bank S.A./N.V. and Clearstream Banking, société
anonyme on or about January , 2022.
______________________
Remarketing Agents
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Barclays
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Wells Fargo Securities
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January , 2022
TABLE OF CONTENTS
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| Prospectus
Supplement |
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About this Prospectus Supplement |
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Summary Information |
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Risk Factors |
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Forward-Looking Statements |
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Where You Can Find More Information |
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Use of Proceeds |
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Capitalization |
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Specific Terms of the Remarketed Debentures |
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Certain U.S. Federal Income Tax Considerations |
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Certain ERISA Considerations |
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Remarketing |
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Legal Matters |
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Experts |
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Prospectus |
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Risk Factors |
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The Company |
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Prospectus Supplements |
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Where You Can Find More Information |
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Use of Proceeds |
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Description of the Senior Notes |
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Description of Common Stock |
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Description of the Junior Subordinated Debentures |
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Description of the Stock Purchase Contracts and the Stock Purchase
Units |
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Book-Entry System |
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Plan of Distribution |
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Legal Opinions |
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Experts |
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ABOUT THIS PROSPECTUS SUPPLEMENT
This document is in two parts. The first part is this prospectus
supplement, which describes the specific terms of this remarketing
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
remarketing agents 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.
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 public utility holding
companies in the United States. We provide, directly or indirectly,
generation, transmission and distribution services to over five
million retail customers in eleven states (Arkansas, Indiana,
Kentucky, Louisiana, Michigan, Ohio, Oklahoma, Tennessee, Texas,
Virginia and West Virginia) through our electric utility
operations.
Our portfolio of assets includes:
•Approximately
24,000 megawatts of owned generating capacity, one of the largest
complements of generation in the United States;
•Approximately
40,000 miles of transmission lines;
•Approximately
223,000 miles of distribution lines that support delivery of
electricity to our customers’ premises; and
Our principal executive offices are located at 1 Riverside Plaza,
Columbus, Ohio, and our telephone number is (614)
716-1000.
The Remarketing
The following summary contains basic information about this
remarketing. For a more complete understanding of this offering, we
encourage you to read this entire prospectus supplement, including
“Specific Terms of the Remarketed Debentures,” and the accompanying
prospectus, including “Description of the Junior Subordinated
Debentures.”
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Issuer |
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American Electric Power Company, Inc. |
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Securities Offered |
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$805,000,000 aggregate principal amount of our 3.40% Junior
Subordinated Debentures due 2024
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Denominations |
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$1,000 or integral multiples in excess thereof
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Maturity |
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March 15, 2024
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Interest |
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We will pay interest semi-annually on the Debentures on March 15
and September 15 of each year, each such date referred to as an
“Interest Payment Date,” until maturity. The interest rate on the
Debentures will be reset to % per year, effective on and after
January , 2022.
The first Interest Payment Date following this remarketing will be
March 15, 2022 and such interest payment will include interest
accrued at an annual rate of % from, and including January , 2022
to, but excluding, such Interest Payment Date.
Following the first Interest Payment Date described above, interest
on each Debenture will accrue from and including the last Interest
Payment Date on which we have paid, or duly provided for the
payment of, interest on that Debenture to, but excluding, the next
succeeding Interest Payment Date.
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Remarketing
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The Debentures were originally issued in March 2019, in connection
with our issuance and sale to the public of our Equity Units
(initially consisting of Corporate Units). Each Corporate Unit
initially consisted of both a purchase contract obligating the
holder to purchase our common stock and a 1/20 undivided beneficial
interest in a $1,000 principal amount of a Debenture. In order to
secure their obligations under the purchase contracts, holders of
the Corporate Units pledged their undivided beneficial ownership
interests in the Debentures to us through The Bank of New York
Mellon Trust Company, N.A.,, as collateral agent.
Pursuant to the terms of the Corporate Units, the Debentures are
being remarketed on behalf of holders of the Corporate Units under
the terms and subject to the conditions contained in a remarketing
agreement. These agreements require Barclays Capital Inc. and Wells
Fargo Securities, LLC, as the remarketing agents, to use their
commercially reasonable efforts to remarket the Debentures at a
public offering price that will result in proceeds sufficient to
purchase the Treasury portfolio at the Treasury portfolio purchase
price plus the remarketing fee, as described under “Use of
Proceeds.” See “Remarketing” beginning on page S-34 of this
prospectus supplement.
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Redemption |
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The Debentures are not subject to redemption prior to maturity at
our option.
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Use of Proceeds
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We are conducting the remarketing on behalf of holders of the
Corporate Units and will not directly receive any proceeds
therefrom. The proceeds from the remarketing, after payment of the
remarketing fee to the remarketing agents, are estimated to be $ .
The proceeds from the remarketing of the Debentures that are
included in the Corporate Units we issued in March 2019, net of the
remarketing fee, will be used to purchase the Treasury portfolio
described in this prospectus supplement, a portion of which will
then be pledged to secure the purchase contract obligations of the
holders of the Corporate Units. Any remaining proceeds from the
remarketing of the Debentures that are included in Corporate Units
will be remitted ratably to holders of those Corporate Units. On
March 15, 2022, a portion of the proceeds from the amount paid upon
the maturity of the Treasury portfolio will be paid to us in
settlement of the obligation of the holders of Corporate Units
under the purchase contracts to purchase shares of our common
stock, in exchange for such shares. See “Use of Proceeds” in this
prospectus supplement.
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Ranking
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The Debentures are subordinated to all our existing and future
Senior Indebtedness. The Debentures are structurally subordinated
to existing or future preferred stock and indebtedness, guarantees
and other liabilities, including trade payables, of our
subsidiaries. See “Description of the Junior Subordinated
Debentures—Subordination” in the accompanying
prospectus.
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U.S. Federal Income Tax Considerations
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We have treated and will continue to treat the Debentures, for U.S.
federal income tax purposes, as indebtedness that is subject to the
U.S. Treasury regulations governing contingent payment debt
instruments. For a detailed discussion, please see “Certain U.S.
Federal Income Tax Considerations” in this prospectus
supplement.
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Risk Factors
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See “Risk Factors” beginning on page S-8 of this prospectus
supplement to read about certain factors you should consider before
making an investment in the Debentures.
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Trustee
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The Bank of New York Mellon Trust Company, N.A. (as successor to
The Bank of New York).
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Governing Law
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The Debentures, and the Subordinated Indenture and supplemental
indentures pursuant to which the Debentures are issued, are
governed by and construed in accordance with the laws of the State
of New York.
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Listing
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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.
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RISK FACTORS
You should carefully consider the risks and uncertainties described
below as well as any cautionary language or other information
contained or incorporated by reference in this prospectus
supplement and the accompanying prospectus, including “Item 1A.
Risk Factors” in our
Annual Report on Form 10-K for the year ended December 31,
2020,
and in our Quarterly Reports on Form 10-Q for the quarters
ended
March 31, 2021,
June 30, 2021
and
September 30, 2021,
before investing in the Debentures. The risks described therein or
set forth below are those that we consider to be the most
significant to your decision whether to invest in the Debentures.
Additional risks and uncertainties not presently known to us or
that we currently deem immaterial may also impair our business
operations, our financial results and the value of our
securities.
Our obligations under the Debentures are subordinated to all of our
Senior Indebtedness.
Our obligations under the Debentures are subordinated to all of our
Senior Indebtedness as defined under “Specific Terms of the
Remarketed Debentures—Ranking of the Debentures” in this prospectus
supplement. This means that we cannot make any payments on the
Debentures until all holders of our Senior Indebtedness have been
paid in full, or provision has been made for such payment, if the
Senior Indebtedness is in default (subject to certain exceptions
for grace periods and waivers). As of September 30, 2021, we had
approximately $6.56 billion of Senior Indebtedness
outstanding.
We must rely on cash from our subsidiaries to make payments on the
Debentures.
We are a holding company that derives substantially all of our
income from our operating subsidiaries. Our subsidiaries are
separate and distinct legal entities and have no obligation to pay
any amounts on the Debentures or to make any funds available for
such payment. Therefore, the Debentures will be effectively
subordinated to all existing and future indebtedness and other
liabilities, including trade payables, debt and preferred stock
incurred or issued by our subsidiaries. In addition to trade
liabilities, many of our operating subsidiaries incur debt in order
to finance their business activities. All of this indebtedness will
be effectively senior to the Debentures. In addition, each
subsidiary’s ability to pay dividends to us depends on any
statutory, regulatory and/or contractual restrictions that may be
applicable to such subsidiary. The Subordinated Indenture pursuant
to which the Debentures will be issued does not place any limit on
the amount of Senior Indebtedness that we may issue, guarantee or
otherwise incur or the amount of liabilities, including debt or
preferred stock, that our subsidiaries may issue, guarantee or
otherwise incur. We expect we and our subsidiaries will from time
to time incur additional indebtedness and other liabilities that
will be senior to the Debentures. At September 30, 2021, the total
long-term indebtedness of our subsidiaries was approximately $29.99
billion (including securities due within one year); this amount
does not include other liabilities.
You should consult with your own tax advisor regarding the tax
consequences of an investment in the Debentures.
For more information regarding the U.S. federal income tax
consequences of the purchase, ownership and disposition of the
Debentures, see “Certain U.S. Federal Income Tax Considerations” in
this prospectus supplement.
Uncertainties with respect to the proper application of the U.S.
Treasury regulations governing contingent payment debt instruments
may affect the amount, timing and character of income, gain or loss
realized by holders of the Debentures.
Because of the manner in which the interest rate on the Debentures
is reset, we have treated and will continue to treat the Debentures
as indebtedness subject to U.S. Treasury regulations governing
contingent payment debt instruments (the “contingent payment debt
regulations”). Furthermore, by
acceptance of a Debenture or a beneficial interest therein, you
will be deemed to have agreed for U.S. federal, state and local
income tax purposes (unless otherwise required by any taxing
authority) to such treatment. Under the contingent payment debt
regulations, regardless of the holders’ method of accounting for
U.S. federal income tax purposes, holders of Debentures are
generally required to accrue interest income on the Debentures on a
constant yield basis at an assumed yield that was determined at the
time of issuance of the Debentures (with certain adjustments), and
actual cash payments of interest on the Debentures will not be
reported separately as taxable income. However, the proper
application of the contingent payment debt regulations to the
Debentures following the remarketing is uncertain in a number of
respects, and we cannot assure holders that the Internal Revenue
Service will not successfully assert a different treatment of the
Debentures than the treatment described in this prospectus
supplement that could materially affect the amount, timing and
character of income, gain or loss with respect to an investment in
the Debentures.
The trading price of the Debentures may not fully reflect the value
of accrued but unpaid interest.
The Debentures may trade at prices that do not fully reflect the
value of accrued but unpaid interest. If holders dispose of their
Debentures between record dates for interest payments, those
holders will be required to include in gross income the daily
portions of original issue discount through the date of disposition
as ordinary income, and to add this amount to their adjusted tax
basis in the Debentures disposed of. To the extent the selling
price is less than a holder’s adjusted tax basis (which will
include accruals of original issue discount through the date of
sale), the holder will recognize a loss. Some or all of this loss
may be capital in nature, and the deductibility of capital losses
for U.S. federal income tax purposes is subject to certain
limitations. See “Certain U.S. Federal Income Tax Considerations”
in this prospectus supplement.
An active trading market for the Debentures may not develop, and
any such market may be illiquid.
We do not intend to apply to list the Debentures on any securities
exchange. The liquidity of any trading market in the Debentures
which may develop, and the market prices quoted therefor, may be
adversely affected by changes in the overall market for this type
of security and by changes in our financial performance or
prospects or in the prospects for companies in our industry
generally. As a result, we 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 their
Debentures at favorable prices or at all.
Any lowering of the credit ratings on the Debentures would likely
reduce their value.
Our credit ratings could be lowered in the future. Any lowering of
the credit rating on the Debentures or our other indebtedness would
likely reduce the value of the Debentures offered
hereby.
FORWARD-LOOKING STATEMENTS
Some of the information contained or incorporated by reference in
this prospectus supplement and in the accompanying prospectus are
forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934. These forward-looking statements
are subject to various risks and uncertainties. Actual results may
vary materially. Among the factors that could cause actual results
to differ materially include, but are not limited to:
•Changes
in economic conditions, electric market demand and demographic
patterns in our service territories.
•The
impact of pandemics, including COVID-19, and any associated
disruption of our business operations due to impacts on economic or
market conditions, costs of compliance with vaccination or testing
mandates to us, electricity usage, employees including employee
reactions to potential vaccination mandates, customers, service
providers, vendors and suppliers.
•Inflationary
or deflationary interest rate trends.
•Volatility
in the financial markets, particularly developments affecting the
availability or cost of capital to finance new capital projects and
refinance existing debt.
•The
availability and costs of funds to finance working capital and
capital needs, particularly during periods when the time lag
between incurring costs and recovery is long and the costs are
material.
•Decreased
demand for electricity.
•Weather
conditions, including storms and drought conditions, and the
ability to recover significant storm restoration
costs.
•The
cost of fuel and its transportation, the creditworthiness and
performance of fuel suppliers and transporters and the cost of
storing and disposing of used fuel, including coal ash and spent
nuclear fuel.
•The
availability of fuel and necessary generation capacity and the
performance of generation plants.
•The
ability to recover fuel and other energy costs through regulated or
competitive electric rates.
•The
ability to build or acquire renewable generation, transmission
lines and facilities (including the ability to obtain any necessary
regulatory approvals and permits) when needed at acceptable prices
and terms, including favorable tax treatment, and to recover those
costs.
•New
legislation, litigation and government regulation, including
changes to tax laws and regulations, oversight of nuclear
generation, energy commodity trading and new or heightened
requirements for reduced emissions of sulfur, nitrogen, mercury,
carbon, soot or particulate matter and other substances that could
impact the continued operation, cost recovery and/or profitability
of generation plants and related assets.
•Evolving
public perception of the risks associated with fuels used before,
during and after the generation of electricity, including coal ash
and nuclear fuel.
•Timing
and resolution of pending and future rate cases, negotiations and
other regulatory decisions, including rate or other recovery of new
investments in generation, distribution and transmission service
and environmental compliance.
•Resolution
of litigation.
•The
ability to constrain operation and maintenance costs.
•Prices
and demand for power generated and sold at wholesale.
•Changes
in technology, particularly with respect to energy storage and new,
developing, alternative or distributed sources of
generation.
•The
ability to recover through rates any remaining unrecovered
investment in generation units that may be retired before the end
of their previously projected useful lives.
•Volatility
and changes in markets for coal and other energy-related
commodities, particularly changes in the price of natural
gas.
•Changes
in utility regulation and the allocation of costs within regional
transmission organizations.
•Changes
in the creditworthiness of the counterparties with contractual
arrangements, including participants in the energy trading
market.
•Actions
of rating agencies, including changes in the ratings of
debt.
•The
impact of volatility in the capital markets on the value of the
investments held by the pension, other postretirement benefits,
captive insurance entity and nuclear decommissioning trust and the
impact of such volatility on future funding
requirements.
•Accounting
standards periodically issued by accounting standard-setting
bodies.
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Other risks and unforeseen events, including wars, the effects of
terrorism (including increased security costs), embargoes,
naturally occurring and human-caused fires, cyber- security threats
and other catastrophic events.
•The
ability to attract and retain the requisite work force and key
personnel.
In light of these risks, uncertainties and assumptions, the
forward-looking statements contained or incorporated by reference
in this prospectus supplement might not occur. Neither AEP nor the
remarketing agents undertake any obligation to publicly update or
revise any forward-looking statements, whether as a result of new
information, future events or otherwise.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports and other information
with the Securities and Exchange Commission (“SEC”). You may
examine our SEC filings through the SEC’s web site at
http://www.sec.gov.
The SEC allows us to “incorporate by reference” the information we
file with them, which means that we can disclose important
information to you by referring you to those documents. The
information incorporated by reference is considered to be part of
this prospectus supplement and the accompanying prospectus, and
later information that we file with the SEC will automatically
update and supersede this information. We incorporate by reference
the document listed below and any future filings made with the SEC
under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange
Act of 1934 until we sell all the Debentures offered
hereby:
•Current
Reports on Form 8-K filed
March 10, 2021,
March 31, 2021,
April 21, 2021,
June 1, 2021,
August 16, 2021,
November 16, 2021
and
December 8, 2021.
You may request a copy of these filings, at no cost, by writing or
telephoning us at the following address:
Investor Relations
American Electric Power Service Corporation
1 Riverside Plaza
Columbus, Ohio 43215
614-716-1000
USE OF PROCEEDS
We are conducting the remarketing on behalf of holders of the
Corporate Units and will not directly receive any proceeds
therefrom.
We are remarketing $805,000,000 aggregate principal amount of the
Debentures on behalf of holders of the Corporate Units. The
proceeds from the remarketing are estimated to be $ , net of
payment of the remarketing fee to the remarketing agents. See
“Remarketing” in this prospectus supplement. Proceeds from the
remarketing will be used as follows:
•$
of the proceeds will be applied to purchase the Treasury portfolio
at the Treasury portfolio purchase price as described below, a
portion of which will then be pledged to the collateral agent to
secure the Corporate Unit holders’ obligations to purchase our
common stock under the purchase contracts on March 15,
2022;
•$
of the proceeds will be used to pay the remarketing fee to the
remarketing agents; and
•any
proceeds from the remarketing of the Debentures that are included
in Corporate Units remaining after deducting the purchase price for
the Treasury portfolio and the remarketing fee will be remitted
ratably to holders of those Corporate Units.
The “Treasury portfolio” consists of:
•U.S.
Treasury securities (or principal or interest strips thereof) that
mature on or prior to March 14, 2022 in an aggregate amount equal
to the principal amount of the Debentures which are a component of
the Corporate Units; and
•U.S.
Treasury securities (or principal or interest strips thereof) that
mature on or prior to March 14, 2022 in an aggregate amount at
maturity equal to the aggregate interest payment that would be due
on March 15, 2022 on the principal amount of the Debentures that
would have been a component of the Corporate Units assuming there
was no remarketing and no reset of the interest rate on the
Debentures and assuming that interest on the Debentures accrued
from the reset effective date to, but excluding, March 15,
2022.
If U.S. Treasury securities (or principal or interest strips
thereof) that are to be included in the Treasury portfolio have a
yield that is less than zero, then instead, at our option, the
Treasury portfolio will consist of an amount in cash equal to the
aggregate principal amount at maturity of the applicable U.S.
Treasury securities (or principal or interest strips thereof)
described above. If the provisions set forth in this paragraph
apply, references to “U.S. Treasury securities (or principal or
interest strips thereof)” in connection with the Treasury portfolio
will, thereafter, be deemed to be references to such amount of
cash.
As used herein, “Treasury portfolio purchase price” means the
lowest aggregate price quoted by a primary U.S. government
securities dealer in New York City to the quotation agent on the
second business day immediately preceding January , 2022 for the
purchase of the Treasury portfolio. We have selected Barclays
Capital Inc. as the quotation agent.
On March 15, 2022, the purchase contract settlement date, a portion
of the proceeds from the amount paid upon the maturity of the
Treasury portfolio will be paid to us in settlement of the
obligation of the holders of Corporate Units under the purchase
contracts to purchase shares of our common stock, in exchange for
such shares. We currently intend to use the proceeds from the
settlement of the purchase contracts for general corporate
purposes. To the extent we do not use such proceeds immediately, we
may temporarily invest them in short-term, interest-bearing
obligations.
CAPITALIZATION
The table below shows our unaudited capitalization on a
consolidated basis as of September 30, 2021. The “As Adjusted”
column reflects our capitalization after giving effect to this
remarketing of the Debentures. We will not directly receive any
cash proceeds from this remarketing, and the table below does not
reflect the settlement of the purchase contracts, which is expected
to take place on March 15, 2022. The table below assumes that the
over-allotment option is not exercised in this
offering.
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As of September 30, 2021
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Actual
|
|
|
As Adjusted
|
|
|
|
|
(In millions)
|
|
|
(In millions)
|
|
|
Short-term borrowings
|
|
$
|
2,504.0
|
|
|
|
2,504.0
|
|
|
Long-term debt:
|
|
|
|
|
|
|
|
|
|
Senior Notes and other long-term debt
|
|
|
32,948.1
|
|
|
|
32,948.1
|
|
|
Junior Subordinated Notes
|
|
|
-
|
|
|
|
795.0
|
1 |
|
Remarketable Subordinated Notes
|
|
|
1,630.1
|
|
|
|
835.2
|
|
|
Total long-term debt
|
|
|
34,578.3
|
|
|
|
34,578.3
|
|
|
Shareholders’ equity
|
|
|
22,262.0
|
|
|
|
22,262.0
|
|
|
Total Capitalization
|
|
$
|
59,344.3
|
|
|
$
|
59,344.3
|
|
|
|
|
|
|
|
|
(1)
|
Assumes $805 million remarketing proceeds, net of $10 million
unamortized issuance expenses consisting of actual expenses
incurred from the March 19, 2019 Mandatory Convertible Equity Units
offering and estimated future expenses of approximately $2 million
associated with the remarketing of the Notes. Does not include the
$750 million of 3.875% Fixed-to-Fixed Reset Rate Junior
Subordinated Debentures issued on November 15, 2021.
|
SPECIFIC TERMS OF THE REMARKETED DEBENTURES
Please read the following information concerning the Debentures in
conjunction with the statements under “Description of the Junior
Subordinated Debentures” in the accompanying prospectus, which the
following information supplements and, in the event of any
inconsistencies, supersedes. The following description does not
purport to be complete and is subject to, and is qualified in its
entirety by reference to, the description in the accompanying
prospectus and the Junior Subordinated Indenture dated as of March
1, 2008 (the “Base Indenture”) between us and The Bank of New York
Mellon Trust Company, N.A. (as successor to The Bank of New York),
as trustee (the “Subordinated Indenture Trustee”), as supplemented
by (i) Supplemental Indenture No. 1, dated March 19, 2019, between
us and the Subordinated Indenture Trustee (“Supplemental Indenture
No. 1”), which supplemented the Base Indenture and created the
initial terms of the Debentures and (ii) Supplemental Indenture No.
4 (“Supplemental Indenture No. 4” and, together with the Base
Subordinated Indenture and Supplemental Indenture No. 1, the
“Subordinated Indenture”), to be dated as of the settlement date of
the Remarketing, between us and the Subordinated Indenture Trustee,
which will further supplement the Base Indenture to reflect the
terms described herein. The Base Indenture is described in the
accompanying prospectus, and a form thereof is filed as an exhibit
to the registration statement under which the Debentures are being
offered and sold.
General
The Debentures are issued under the Subordinated
Indenture.
The aggregate principal amount of the Debentures to be remarketed
pursuant to this prospectus supplement is
$805,000,000.
The Debentures have been issued in denominations of $1,000 or
integral multiples in excess thereof.
Interest and Maturity
We will pay interest semi-annually on the Debentures on March 15
and September 15 of each year, each such date referred to as an
“Interest Payment Date,” until maturity. The interest rate on the
Debentures will be reset to % per year, effective on and after
January , 2022. The Debentures will mature on March 15,
2024.
The first Interest Payment Date following this remarketing will be
March 15, 2022 and such interest payment will include interest
accrued at an annual rate of % from, and including January , 2022
to, but excluding, such Interest Payment Date.
Following the first Interest Payment Date described above, interest
on each Debenture will accrue from and including the last Interest
Payment Date on which we have paid, or duly provided for the
payment of, interest on that Debenture to, but excluding, the next
succeeding Interest Payment Date. No interest will accrue on a
Debenture for the day that the Debenture matures. The amount of
interest payable for any period will be computed on the basis of a
360-day year consisting of twelve 30-day months. The amount of
interest payable for any period shorter than a full semi-annual
period for which interest is computed will be computed on the basis
of the number of days in the period using 30-day calendar
months.
The record date for interest payable on any Interest Payment Date
shall be the close of business on (1) the business day immediately
preceding such Interest Payment Date so long as all of the
Debentures remain in book-entry only form or (2) a day selected by
us, which shall be at least one business day but no
more than 60 business days prior to such Interest Payment Date if
any of the Debentures do not remain in book-entry only form. See
“— Book-Entry Only Issuance” in this prospectus
supplement.
If any date on which interest, principal or premium, if any, is
payable on the Debentures falls on a day that is not a business
day, then payment of the interest, principal or premium payable on
that date will be made on the next succeeding day which is a
business day, and no interest will be paid or other payment made in
respect of such delay. However, if that business day is in the next
succeeding calendar year, that payment will be made on the
immediately preceding business day, in each case with the same
force and effect as if made on the Interest Payment
Date.
The term “business day” means any day, other than a Saturday or
Sunday, which is not a day on which banking institutions or trust
companies in New York, New York are generally authorized or
required by law, regulation or executive order to remain
closed.
Ranking of the Debentures
Our payment obligation under the Debentures will be unsecured and
will rank junior and be subordinated in right of payment and upon
liquidation to all of our Senior Indebtedness. However, the
Debentures will rank equally in right of payment with any Pari
Passu Securities.
“Senior Indebtedness,” when used with respect to the Company, means
all of the Company’s obligations, whether presently existing or
from time to time hereafter incurred, created, assumed or existing,
to pay principal, premium, interest, penalties, fees and any other
payment in respect of any of the following:
•obligations
for borrowed money, including without limitation, such obligations
as are evidenced by credit agreements, notes, debentures, bonds or
other securities or instruments;
•capitalized
lease obligations;
•our
obligation for reimbursement under letters of credit, security
purchase facilities, or similar facilities issued for our
account;
•all
obligations of the types referred to in the three preceding bullet
points of others which we have assumed, endorsed, guaranteed,
contingently agreed to purchase or provide funds for the payment
of, or otherwise becomes liable for, under any agreement;
or
•all
renewals, extensions or refundings of obligations of the kinds
described in any of the preceding categories.
Any such obligation, indebtedness, renewal, extension or refunding,
however, will not be Senior Indebtedness if the instrument creating
or evidencing it or the assumption or guarantee of it provides that
it is not superior in right of payment to or is equal in right of
payment with the Debentures. Furthermore, trade accounts payable
and accrued liabilities arising in the ordinary course of business
will not be Senior Indebtedness. Senior Indebtedness will be
entitled to the benefits of the subordination provisions in the
Subordinated Indenture irrespective of the amendment, modification
or waiver of any term of the Senior Indebtedness.
No payment of the principal (including redemption and sinking fund
payments) of, or interest, or premium, if any, on the Debentures
may be made by us until all holders of Senior Indebtedness have
been paid in full (or provision has been made for such payment), if
any of the following occurs:
•certain
events of bankruptcy, insolvency, reorganization, dissolution or
winding up of the Company;
•any
of our Senior Indebtedness is not paid when due (after the
expiration of any applicable grace period) and that default
continues without waiver; or
•any
other default has occurred and continues without waiver (after the
expiration of any applicable grace period) pursuant to which the
holders of our Senior Indebtedness are permitted to accelerate the
maturity of such Senior Indebtedness.
Upon any distribution of our assets to creditors in connection with
any insolvency, bankruptcy or similar proceeding, all principal of,
and premium, if any, and interest due or to become due on all
Senior Indebtedness must be paid in full before the holders of the
Debentures are entitled to receive or retain any payment from such
distribution.
“Pari Passu Securities” means:
•indebtedness
and other securities that, among other things, by their terms ranks
equally with the Debentures, in right of payment and upon
liquidation; and
•guarantees
of indebtedness or other securities described in the preceding
bullet point.
“Pari Passu Securities” also includes our trade accounts payable
and accrued liabilities arising in the ordinary course of
business.
We are a holding company that derives substantially all of our
income from our operating subsidiaries. Our subsidiaries are
separate and distinct legal entities and have no obligation to pay
any amounts on the Debentures or to make any funds available for
such payment. Therefore, the Debentures will be effectively
subordinated to all indebtedness and other liabilities, including
trade payables, debt and preferred stock, if any, incurred or
issued by our subsidiaries. In addition to trade liabilities, many
of our operating subsidiaries incur debt in order to finance their
business activities. All of this indebtedness will be effectively
senior to the Debentures. In addition, each subsidiary’s ability to
pay dividends to us depends on statutory, regulatory and/or
contractual restrictions that may be applicable to such subsidiary.
The Subordinated Indenture does not place any limit on the amount
of Senior Indebtedness that we may issue, guarantee or otherwise
incur or the amount of liabilities, including debt or preferred
stock, that our subsidiaries may issue, guarantee or otherwise
incur. We expect that we and our subsidiaries will incur from time
to time additional indebtedness and other liabilities that will be
senior to the Debentures. At September 30, 2021, our Senior
Indebtedness, on an unconsolidated basis, totaled approximately
$6.56 billion. At September 30, 2021, our subsidiaries had
approximately $29.99 billion of long-term indebtedness outstanding
(including securities due within one year); this amount does not
include other liabilities.
Redemption
The Debentures are not subject to redemption prior to maturity at
our option.
Events of Default
See “Description of the Junior Subordinated Debentures - Events of
Default” in the accompanying prospectus.
Consolidation, Merger or Sale
See “Description of the Junior Subordinated Debentures -
Consolidation, Merger or Sale” in the accompanying
prospectus.
Book-Entry Only Issuance
DTC acts as the securities depository for the Debentures. The
Debentures remarketed hereby will be issued only as
fully-registered securities registered in the name of Cede &
Co., DTC’s nominee, or such other name as may be requested by an
authorized representative of DTC. One or more fully-registered
global Debentures certificates will be issued, representing in the
aggregate the total principal amount of Debentures, and will be
deposited with the Junior Subordinated Note Indenture Trustee on
behalf of DTC. Investors may hold interests in the Debentures
offered hereby through DTC if they are participants in DTC or
indirectly through organizations that are participants in DTC,
including Euroclear Bank S.A./N.V., as operator of the Euroclear
system, or Clearstream Banking, société anonyme, Luxembourg
(“Clearstream”).
DTC is a limited-purpose trust company organized under the New York
Banking Law, a “banking organization” within the meaning of the New
York Banking Law, a member of the Federal Reserve System, a
“clearing corporation” within the meaning of the New York Uniform
Commercial Code and a “clearing agency” registered pursuant to the
provisions of Section 17A of the 1934 Act. DTC holds and provides
asset servicing for over 3.5 million issues of United States and
non-United States equity issues, corporate and municipal debt
issues and money market instruments (from over 100 countries) that
DTC’s participants (“Direct Participants”) deposit with DTC. DTC
also facilitates the post-trade settlement among Direct
Participants of sales and other securities transactions in
deposited securities, through electronic computerized book-entry
transfers and pledges between Direct Participants’ accounts. This
eliminates the need for physical movement of securities
certificates. Direct Participants include both United States and
non-United States securities brokers and dealers, banks, trust
companies, clearing corporations and certain other organizations.
DTC is a wholly-owned subsidiary of The Depository Trust &
Clearing Corporation (“DTCC”). DTCC is the holding company for DTC,
National Securities Clearing Corporation and Fixed Income Clearing
Corporation, all of which are registered clearing agencies. DTCC is
owned by the users of its regulated subsidiaries. Access to the DTC
system is also available to others such as both United States and
non-United States securities brokers and dealers, banks, trust
companies and clearing corporations that clear through or maintain
a custodial relationship with a Direct Participant, either directly
or indirectly (“Indirect Participants”). The DTC rules applicable
to its Direct and Indirect Participants are on file with the SEC.
More information about DTC can be found at www.dtcc.com. The
contents of such website do not constitute part of this prospectus
supplement.
Purchases of Debentures under the DTC system must be made by or
through Direct Participants, which will receive a credit for the
Debentures on DTC’s records. The ownership interest of each actual
purchaser of each Debentures (“Beneficial Owner”) is in turn to be
recorded on the Direct and Indirect Participants’ records.
Beneficial Owners will not receive written confirmation from DTC of
their purchases. Beneficial Owners, however, are expected to
receive written confirmations providing details of the
transactions, as well as periodic statements of their holdings,
from the Direct or Indirect Participants through which the
Beneficial Owners purchased Debentures. Transfers of ownership
interests in the Debentures are to be accomplished by entries made
on the books of Direct and Indirect Participants acting on behalf
of Beneficial Owners. Beneficial Owners will not receive
certificates representing their ownership interests in Debentures,
except in the event that use of the book-entry system for the
Debentures is discontinued.
To facilitate subsequent transfers, all Debentures deposited by
Direct Participants with DTC are registered in the name of DTC’s
nominee, Cede & Co., or such other name as may be requested by
an authorized representative of DTC. The deposit of Debentures with
DTC and their registration in the name of Cede & Co. or such
other DTC nominee do not effect any changes in beneficial
ownership. DTC has no knowledge of the actual Beneficial Owners of
the Debentures. DTC’s records reflect only the identity of the
Direct Participants to whose accounts such Debentures are credited,
which may or may not be the
Beneficial Owners. The Direct and Indirect Participants will remain
responsible for keeping account of their holdings on behalf of
their customers.
Conveyance of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants, and
by Direct Participants and Indirect Participants to Beneficial
Owners will be governed by arrangements among them, subject to any
statutory or regulatory requirements as may be in effect from time
to time.
Although voting with respect to the Debentures is limited, in those
cases where a vote is required, neither DTC nor Cede & Co. (nor
any other DTC nominee) will consent or vote with respect to the
Debentures unless authorized by a Direct Participant in accordance
with DTC’s procedures. Under its usual procedures, DTC mails an
Omnibus Proxy to the Company as soon as possible after the record
date. The Omnibus Proxy assigns Cede & Co.’s consenting or
voting rights to those Direct Participants to whose accounts the
Debentures are credited on the record date (identified in a listing
attached to the Omnibus Proxy).
Payments on the Debentures will be made to Cede & Co., or such
other nominee as may be requested by an authorized representative
of DTC. DTC’s practice is to credit Direct Participants’ accounts
upon DTC’s receipt of funds and corresponding detail information
from the Company or the Junior Subordinated Note Indenture Trustee
on the relevant payment date in accordance with their respective
holdings shown on DTC’s records. Payments by Direct or Indirect
Participants to Beneficial Owners will be governed by standing
instructions and customary practices, as is the case with
securities held for the account of customers registered in “street
name,” and will be the responsibility of such Direct or Indirect
Participant and not of DTC or the Company, subject to any statutory
or regulatory requirements as may be in effect from time to time.
Payment to Cede & Co. (or such other nominee as may be
requested by an authorized representative of DTC) is the
responsibility of the Company, disbursement of such payments to
Direct Participants is the responsibility of DTC, and disbursement
of such payments to the Beneficial Owners is the responsibility of
Direct and Indirect Participants.
Except as provided herein, a Beneficial Owner of global Debentures
will not be entitled to receive physical delivery of Debentures.
Accordingly, each Beneficial Owner must rely on the procedures of
DTC to exercise any rights under the Debentures. The laws of some
jurisdictions require that certain purchasers of securities take
physical delivery of securities in definitive form. Such laws may
impair the ability to transfer beneficial interests in global
Debentures.
DTC may discontinue providing its services as securities depository
with respect to the Debentures at any time by giving reasonable
notice to the Company. Under such circumstances, in the event that
a successor securities depository is not obtained, Debentures
certificates will be required to be printed and delivered to the
holders of record. Additionally, the Company may decide to
discontinue use of the system of book-entry transfers through DTC
(or a successor securities depository) with respect to the
Debentures. The Company understands, however, that under current
industry practices, DTC would notify its Direct and Indirect
Participants of the Company’s decision, but will only withdraw
beneficial interests from global Debentures at the request of each
Direct or Indirect Participant. In that event, certificates for the
Debentures will be printed and delivered to the applicable Direct
or Indirect Participant.
The information in this section concerning DTC and DTC’s book-entry
system has been obtained from sources that the Company believes to
be reliable, but neither the Company nor any remarketing agent
takes any responsibility for the accuracy thereof. Neither the
Company nor any remarketing agent has any responsibility for the
performance by DTC or its Direct or Indirect Participants of their
respective obligations as described herein or under the rules and
procedures governing their respective operations.
Global Clearance and Settlement Procedures
Secondary market trading between Clearstream participants and/or
Euroclear system participants will occur in the ordinary way in
accordance with the applicable rules and operating procedures of
Clearstream and the Euroclear system, as applicable.
Cross-market transfers between persons holding directly or
indirectly through DTC on the one hand, and directly or indirectly
through Clearstream participants or Euroclear system participants
on the other, will be effected through DTC in accordance with DTC
rules on behalf of the relevant European international clearing
system by its United States depositary; however, such cross-market
transactions will require delivery of instructions to the relevant
European international clearing system by the counterparty in such
system in accordance with its rules and procedures and within its
established deadlines (European time). The relevant European
international clearing system will, if the transaction meets its
settlement requirements, deliver instructions to its United States
depositary to take action to effect final settlement on its behalf
by delivering or receiving securities in DTC, and making or
receiving payment in accordance with normal procedures for same-day
funds settlement applicable to DTC. Clearstream participants and
Euroclear system participants may not deliver instructions directly
to their respective United States depositaries.
Because of time-zone differences, credits of Debentures received in
Clearstream or the Euroclear system as a result of a transaction
with a DTC participant will be made during subsequent securities
settlement processing and dated the business day following the DTC
settlement date. Such credits or any transactions in such
Debentures settled during such processing will be reported to the
relevant Clearstream participant or Euroclear system participant on
such business day. Cash received in Clearstream or the Euroclear
system as a result of sales of the Debentures by or through a
Clearstream participant or a Euroclear system participant to a DTC
participant will be received with value on the DTC settlement date
but will be available in the relevant Clearstream, Luxembourg or
the Euroclear system cash account only as of the business day
following settlement in DTC.
The information in this section concerning DTC and DTC’s book-entry
system, Clearstream, Luxembourg and the Euroclear system has been
obtained from sources that we believe to be reliable. Neither we
nor the remarketing agents take any responsibility for the accuracy
of this information.
Agreement of Certain Tax Treatment
By acceptance of a Debenture or a beneficial interest therein, you
will be deemed to have agreed for U.S. federal, state and local
income tax purposes (unless otherwise required by any taxing
authority) (i) to treat the Debenture as indebtedness that is a
“contingent payment debt instrument” (as that term is used in U.S.
Treasury regulations section 1.1275-4) and (ii) to be bound by our
determination of the comparable yield and projected payment
schedule with respect to the Debenture. See “Certain U.S. Federal
Income Tax Considerations.”
CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS
The following summary describes certain U.S. federal income tax
consequences of the purchase, ownership and disposition of the
Debentures. This summary deals only with Debentures held as capital
assets (within the meaning of Section 1221 of the Internal Revenue
Code of 1986, as amended (the “Code”)) by persons who purchase the
Debentures pursuant to this offering at the price indicated on the
cover page of this prospectus supplement.
This summary does not represent a detailed description of the U.S.
federal income tax consequences applicable to you if you are a
person subject to special treatment under the U.S. federal income
tax laws, including, without limitation:
•a
dealer or broker in securities or currencies;
•a
trader in securities that has elected the mark-to-market method of
accounting for your securities;
•a
regulated investment company;
•a
real estate investment trust;
•a
tax-exempt entity;
•an
insurance company;
•a
person holding the Debentures as part of a hedging, integrated,
conversion or constructive sale transaction or a
straddle;
•a
bank or other financial institution;
•a
person liable for alternative minimum tax;
•a
partnership or other pass through entity for U.S. federal income
tax purposes (or an investor in such an entity);
•a
person required to accelerate the recognition of any item of gross
income with respect to the Debentures as a result of such income
being recognized on an applicable financial statement;
•a
U.S. holder (as defined below) whose “functional currency” is not
the U.S. dollar;
•a
“controlled foreign corporation”;
•a
“passive foreign investment company”; or
•a
United States expatriate.
This summary below is based upon the provisions of the Code and
regulations, rulings and judicial decisions as of the date hereof.
Those authorities may be changed, perhaps retroactively, so as to
result in U.S. federal income tax consequences different from those
summarized below. We have not sought and will not seek any rulings
from the Internal Revenue Service (“IRS”) regarding the matters
discussed below. There can be no assurance that the IRS will not
take positions concerning the tax consequences of the purchase,
ownership or disposition of the Debentures that are different from
those discussed below.
If an entity or arrangement classified as a partnership for U.S.
federal income tax purposes holds the Debentures, the tax treatment
of a partner generally will depend upon the status of the partner
and the activities of the partnership. If you are a partnership or
a partner of a partnership considering an investment in the
Debentures, you should consult your own tax advisors.
This summary does not address all of the U.S. federal income tax
consequences that may be relevant to you in light of your personal
circumstances, nor does it address the Medicare tax on net
investment income, U.S. federal estate and gift taxes or the
effects of any state, local or foreign tax laws.
Moreover, we cannot assure you that a change in law will not alter
significantly the tax considerations that we describe in this
summary.
If you are considering the purchase of the Debentures, you should
consult your own tax advisors concerning the particular U.S.
federal income tax consequences to you in light of your particular
situation, as well as the consequences to you arising under other
U.S. federal tax laws and the laws of any other taxing
jurisdiction.
Classification of the Debentures
No statutory, judicial or administrative authority directly
addresses all aspects of the treatment of the Debentures or
instruments similar to the Debentures for U.S. federal income tax
purposes. As a result, the U.S. federal income tax consequences of
the purchase, ownership and disposition of the Debentures are
unclear. We believe, and the remainder of this discussion assumes,
that the Debentures are indebtedness for U.S. federal income tax
purposes. Furthermore, because of the manner in which the interest
rate on the Debentures is reset, we have treated and will continue
to treat the Debentures as contingent payment debt instruments
under the applicable U.S. Treasury regulations (the “contingent
payment debt regulations”), and the remainder of this discussion
assumes such treatment. By acceptance of a Debenture or a
beneficial interest therein, you will be deemed to have agreed for
U.S. federal, state and local income tax purposes (unless otherwise
required by any taxing authority) to treat the Debenture as
indebtedness that is a contingent payment debt instrument under the
contingent payment debt regulations. Under the contingent payment
debt regulations, regardless of a holder’s method of accounting for
U.S. federal income tax purposes, a holder of Debentures is
generally required to accrue interest income on the Debentures on a
constant yield basis at an assumed yield that was determined at the
time of issuance of the Debentures (with certain adjustments), and
actual cash payments of interest on the Debentures will not be
reported separately as taxable income. However, the proper
application of the contingent payment debt regulations to the
Debentures following the remarketing is uncertain in a number of
respects, and we cannot assure holders that the IRS will not
successfully assert a different treatment of the Debentures than
the treatment described herein that could materially affect the
amount, timing and character of income, gain or loss with respect
to an investment in the Debentures.
Alterations Occurring as a Result of the Remarketing
A modification of the terms of a debt instrument is treated for
U.S. federal income tax purposes as resulting in a deemed exchange
of the debt instrument if the modification is a “significant
modification” within the meaning of the applicable U.S. Treasury
regulations. Under these regulations, an alteration that occurs by
operation of the terms of the debt instrument (including
alterations resulting from the exercise of an option held by us) is
not treated as a “modification,” unless (i) the alteration results
in the substitution of a new obligor, the addition or deletion of a
co-obligor, or a change in the recourse nature of the debt
instrument, (ii) the alteration creates an instrument that is not
indebtedness for U.S. federal income tax purposes or (iii) the
alteration results from the exercise of an option that is not
unilateral.
All the alterations in the terms of the Debentures that result from
the remarketing occur by operation of the original terms of the
Debentures. Therefore, although not free from doubt, we believe
that these alterations do not constitute a “modification” for
purposes of the applicable U.S. Treasury regulations. Accordingly,
for U.S. federal income tax purposes, we believe that the
Debentures (as in existence immediately after the remarketing) will
be treated as a continuation of the original Debentures and the
rest of this discussion so assumes.
U.S. Holders
The following is a summary of certain U.S. federal income tax
consequences that will apply to you if you are a U.S.
holder.
As used herein, a “U.S. holder” means a beneficial owner of the
Debentures that is, for U.S. federal income tax purposes, any of
the following:
•an
individual who is a citizen or resident of the United
States;
•a
corporation (or any other entity treated as a corporation for U.S.
federal income tax purposes) that is created or organized in or
under the laws of the United States, any state thereof or the
District of Columbia;
•an
estate the income of which is subject to U.S. federal income
taxation regardless of its source; or
•a
trust if it (i) is subject to the primary supervision of a court
within the United States and one or more United States persons have
the authority to control all substantial decisions of the trust or
(ii) has a valid election in effect under applicable U.S. Treasury
regulations to be treated as a United States person.
Accrual of Interest
Under the contingent payment debt regulations, each year you will
be required to include in income original issue discount (“OID”)
adjusted in the manner described below, regardless of your usual
method of tax accounting. Such OID will be based on the comparable
yield (as described below) of the Debentures and will be taxable as
ordinary income. This amount will differ from the interest payments
actually received by you.
Pursuant to the contingent payment debt regulations, as of the
issue date of the Debentures, we were required to provide the
comparable yield and, solely for tax purposes, a projected payment
schedule with respect to the Debentures. The comparable yield of
the Debentures generally is the rate at which the Company would
issue a fixed rate debt instrument with terms and conditions
similar to the Debentures. We determined, as of the issue date of
the Debentures, that the comparable yield for the Debentures was
4.00%, compounded quarterly. Based on the comparable yield, we
determined that the projected payment schedule for the Debentures
per $50 of principal amount was $0.4061 for the period ending on
June 15, 2019, $0.425 for each subsequent quarter ending on or
prior to the remarketing date, and $1.25 for each six months ending
after the remarketing date (which does not include the payment of
principal at maturity). Following the remarketing, the Debentures
will have a revised projected payment schedule corresponding to the
stated interest and principal amounts due thereon. By acceptance of
a Debenture or a beneficial interest therein, you will be deemed to
have agreed for U.S. federal, state and local income tax purposes
(unless otherwise required by any taxing authority) to be bound by
our determination of the comparable yield and projected payment
schedule with respect to the Debentures. For U.S. federal income
tax purposes, you must use the comparable yield and the projected
payments set forth in the projected payment schedule in determining
your interest accruals, and the adjustments thereto, in respect of
the Debentures. The comparable yield and the projected payment
schedule are not provided for any purpose other than determining
your interest accruals, and the adjustments thereto, in respect of
the Debentures and do not constitute a representation regarding the
actual amount of any payment on a Debenture.
The amount of OID on a Debenture for each accrual period is
determined by multiplying the comparable yield of the Debenture,
adjusted for the length of the accrual period, by the Debenture’s
adjusted issue price at the beginning of the accrual period,
determined in accordance with the rules set forth in the contingent
payment debt regulations, and then increased (or decreased) by the
amount of any positive (or negative) adjustments described below.
The adjusted issue price of each Debenture at the
beginning of each accrual period generally equals its initial issue
price of $50, increased by any OID previously accrued on the
Debenture at the comparable yield and decreased by the projected
amount of any payments previously scheduled to be made on the
Debenture through such date, and further increased (or decreased)
by the amount of any positive (or negative) adjustments
attributable to contingent payments on the Debenture becoming fixed
(as described later in this paragraph). The amount of OID so
determined is then allocated on a ratable basis to each day in the
accrual period that you held the Debenture. Following the
remarketing, the Debentures will become subject to special rules
that become applicable to contingent payment debt instruments when
all of the contingent payments have become fixed. Under these
special rules, there will be a positive or negative adjustment
equal to the difference between (i) the present value of the total
remaining principal and interest payments due on the Debenture over
(ii) the present value of the total remaining payments set forth on
the projected payment schedule for such Debenture. You must take
into account any such positive or negative adjustments (as
adjustments to your OID inclusions) in a reasonable manner over the
period to which such adjustments relate. Any such positive or
negative adjustment will increase or decrease, respectively, your
tax basis in the Debenture.
For the purchase of a Debenture in the remarketing for an amount
that differs from the adjusted issue price of the Debenture at the
time of such purchase, you will still be required to accrue OID on
the Debenture in accordance with the comparable yield. However,
such difference will result in adjustments to your OID inclusions.
If the purchase price of a Debenture is less than its adjusted
issue price, a positive adjustment (i.e., an increase in OID
inclusions) will result, and if the purchase price of a Debenture
is greater than its adjusted issue price, a negative adjustment
(i.e., a decrease in OID inclusions) will result. Any difference
between your purchase price for the Debenture and the adjusted
issue price of the Debenture should generally be allocated under a
reasonable method to daily portions of OID over the remaining term
of the Debenture. The amount so allocated to a daily portion of OID
should generally be taken into account as an increase or a decrease
in such OID on the date the daily portion accrues. Any such
positive or negative adjustment will increase or decrease,
respectively, your tax basis in the Debenture.
The rules regarding the timing and amount of OID accruals and any
positive or negative adjustments are not entirely clear, and you
should consult your own tax advisors regarding these matters,
including in particular with respect to the treatment of any
negative adjustments. As a general matter, any negative adjustment
with respect to a Debenture that exceeds the amount of OID accrued
in the current year will be treated as ordinary loss to the extent
of your total prior OID inclusions with respect to the Debenture,
reduced to the extent such prior OID was offset by prior negative
adjustments. Any excess negative adjustment will be treated as a
regular negative adjustment in the succeeding taxable year, and if
not used by the time of the sale, exchange or other taxable
disposition of the Debenture, will reduce the amount realized upon
such sale, exchange or other taxable disposition.
Certain U.S. holders will receive IRS Forms 1099-OID, which report
interest accruals on their Debentures. Those forms will not,
however, reflect the effect of any positive or negative adjustments
resulting from such U.S. holders’ purchase of the Debentures in the
remarketing at a price that differs from the adjusted issue price
of the Debentures on the date of purchase. You should consult your
own tax advisors as to whether, and how, such adjustments should be
made to the amounts reported on any IRS Form 1099-OID.
Sale, Exchange or Other Taxable Disposition of
Debentures
Upon the sale, exchange or other taxable disposition of a
Debenture, you generally will recognize gain or loss equal to the
difference, if any, between the amount realized upon the sale,
exchange or other taxable disposition and your adjusted tax basis
in the Debenture. The amount realized for this purpose will be
reduced by the amount of any negative adjustments carried forward
(as discussed above). Gain and, to some extent, loss recognized on
the sale, exchange or other taxable disposition of a Debenture at
any time
up to and including March 15, 2022 will generally be treated as
ordinary income or loss. The amount of any ordinary loss will not
exceed your prior net interest inclusions (reduced by the total net
negative adjustments previously allowed as an ordinary loss). Gain
recognized on the sale, exchange or other taxable disposition of a
Debenture occurring after March 15, 2022 will generally be ordinary
income to the extent there are positive adjustments attributable to
the excess, if any, of (i) the present value of the total remaining
principal and interest payments due on the Debenture over (ii) the
present value of the total remaining payments set forth on the
projected payment schedule for such Debenture (in the case of both
clauses (i) and (ii), as determined when the interest rate on the
Debentures is reset), and such positive adjustments have not yet
been accrued and included in your income. Any gain or loss
recognized on a sale, exchange or other taxable disposition of a
Debenture that is not treated as ordinary income or loss (as
described above) generally will be treated as capital gain or loss.
In the case of a non-corporate U.S. holder (including an
individual), capital gains derived in respect of capital assets
held for more than one year are subject to tax at preferential
rates. The deductibility of capital losses is subject to certain
limitations.
Special rules apply in determining the tax basis of a Debenture.
Your adjusted tax basis in a Debenture is generally your purchase
price, increased by OID previously accrued on the Debenture (as
adjusted by any positive or negative adjustments as described
above), and reduced by the projected amounts of any payments
previously made to you.
Information Reporting and Backup Withholding
In general, information reporting requirements will apply to
payments of interest on the Debentures, accruals of OID and the
proceeds of the sale or other taxable disposition (including a
retirement or redemption) of Debentures paid to you, unless in each
case you are an exempt recipient such as a corporation. Backup
withholding may apply to any such payments if you fail to provide a
taxpayer identification number or a certification that you are not
subject to backup withholding.
Backup withholding is not an additional tax and any amounts
withheld under the backup withholding rules will be allowed as a
refund or a credit against your U.S. federal income tax liability,
provided the required information is timely furnished to the
IRS.
Non-U.S. Holders
The following is a summary of certain U.S. federal income tax
consequences that will apply to you if you are a non-U.S. holder.
As used herein, the term “non-U.S. holder” means a beneficial owner
of the Debentures that is, for U.S. federal income tax purposes, an
individual, corporation, estate or trust that is not a U.S.
holder.
U.S. Federal Withholding Tax
Subject to the discussions of backup withholding and FATCA below,
U.S. federal withholding tax will not apply to any payment of
interest (which, for purposes of this discussion of non-U.S.
holders, includes any OID) on the Debentures under the “portfolio
interest rule,” provided that:
•interest
paid on the Debentures is not effectively connected with your
conduct of a trade or business in the United States;
•you
do not actually or constructively own 10% or more of the total
combined voting power of all classes of our voting stock within the
meaning of the Code and applicable U.S. Treasury
regulations;
•you
are not a controlled foreign corporation that is actually or
constructively related to us through stock ownership;
•you
are not a bank whose receipt of interest on the Debentures is
described in Section 881(c)(3)(A) of the Code; and
•either
(a) you provide your name and address on an applicable IRS Form
W-8, and certify, under penalties of perjury, that you are not a
United States person as defined under the Code, or (b) you hold
your Debentures through certain foreign intermediaries and you
satisfy the certification requirements of applicable U.S. Treasury
regulations. Special certification rules apply to non-U.S. holders
that are pass-through entities rather than corporations or
individuals.
If you cannot satisfy the requirements described above, payments of
interest made to you will be subject to a 30% U.S. federal
withholding tax, unless you provide the applicable withholding
agent with a properly executed:
•IRS
Form W-8BEN or Form W-8BEN-E (or other applicable form) claiming an
exemption from, or reduction in the rate of, withholding under the
benefit of an applicable income tax treaty; or
•IRS
Form W-8ECI (or other applicable form) certifying that interest
paid on the Debentures is not subject to withholding tax because it
is effectively connected with your conduct of a trade or business
in the United States (as discussed below under “—U.S. Federal
Income Tax”).
The 30% U.S. federal withholding tax generally will not apply to
any gain that you realize on the sale, exchange or other taxable
disposition of the Debentures. However, any amount treated as
interest income upon any such sale, exchange or other taxable
disposition may be subject to the 30% U.S. federal withholding tax
unless you are eligible for exemption from such withholding tax
under the “portfolio interest rule” described above.
U.S. Federal Income Tax
If you are engaged in a trade or business in the United States and
interest on the Debentures (including the portion of any gain
realized on the sale, exchange or other taxable disposition of the
Debentures that is treated as interest income) is effectively
connected with the conduct of that trade or business (and, if
required by an applicable income tax treaty, is attributable to a
U.S. permanent establishment), you generally will be subject to
U.S. federal income tax on that interest on a net income basis
(although exempt from the 30% U.S. federal withholding tax) in the
same manner as if you were a United States person as defined under
the Code. Certain certification and disclosure requirements (as
discussed above under “—U.S. Federal Withholding Tax”) must be
complied with in order for effectively connected interest income to
be exempt from withholding. In addition, if you are a foreign
corporation, you may be subject to a branch profits tax equal to
30% (or lower applicable treaty rate) of your earnings and profits
for the taxable year, subject to adjustments, that are effectively
connected with the conduct by you of a trade or business in the
United States. For this purpose, interest on the Debentures will be
included in earnings and profits.
Subject to the discussion of backup withholding below, any gain
realized on the sale, exchange or other taxable disposition of the
Debentures (excluding any portion treated as interest income)
generally will not be subject to U.S. federal income tax
unless:
•the
gain is effectively connected with the conduct of a trade or
business by you in the United States (and, if required by an
applicable income tax treaty, is attributable to a U.S. permanent
establishment), in which case such gain generally will be subject
to U.S. federal income tax (and possibly branch profits tax) in the
same manner as effectively connected interest as described above;
or
•you
are an individual who is present in the United States for 183 days
or more in the taxable year of that disposition and certain other
conditions are met, in which case, unless an applicable income tax
treaty provides otherwise, you generally will be subject to a 30%
U.S. federal income tax on any gain recognized, which may be offset
by certain U.S.-source capital losses.
Information Reporting and Backup Withholding
Generally, the amount of interest on the Debentures paid to you and
the amount of tax, if any, withheld with respect to those payments
will be reported to the IRS. Copies of the information returns
reporting such interest payments and any withholding may also be
made available to the tax authorities in the country in which you
reside under the provisions of an applicable income tax treaty or
information sharing agreement. In general, no backup withholding
will be required regarding payments of interest on the Debentures
that we make to you, provided that the applicable withholding agent
has received from you the statement described above in the fifth
bullet point under “—U.S. Federal Withholding Tax.”
Information reporting and, depending on the circumstances, backup
withholding will apply to the proceeds of a sale or other taxable
disposition (including a retirement or redemption) of Debentures
within the United States or conducted through certain U.S.-related
financial intermediaries, unless you certify under penalties of
perjury that you are not a United States person as defined under
the Code, or you otherwise establish an exemption.
Backup withholding is not an additional tax and any amounts
withheld under the backup withholding rules will be allowed as a
refund or a credit against your U.S. federal income tax liability,
provided the required information is timely furnished to the
IRS.
Additional Withholding Requirements
Under Sections 1471 through 1474 of the Code (such Sections
commonly referred to as “FATCA”), a 30% U.S. federal withholding
tax may apply to any interest paid on the Debentures to (i) a
“foreign financial institution” (as specifically defined in the
Code and whether such foreign financial institution is the
beneficial owner or an intermediary) that does not provide
sufficient documentation, typically on IRS Form W-8BEN-E,
evidencing either (x) an exemption from FATCA, or (y) its
compliance (or deemed compliance) with FATCA (which may
alternatively be in the form of compliance with an
intergovernmental agreement with the United States) in a manner
that avoids withholding, or (ii) a “non-financial foreign entity”
(as specifically defined in the Code and whether such non-financial
foreign entity is the beneficial owner or an intermediary) that
does not provide sufficient documentation, typically on IRS Form
W-8BEN-E, evidencing either (x) an exemption from FATCA, or (y)
adequate information regarding certain substantial U.S. beneficial
owners of such entity (if any). If an interest payment is both
subject to withholding under FATCA and subject to the withholding
tax discussed above under “—U.S. Federal Withholding Tax,” an
applicable withholding agent may credit the withholding under FATCA
against, and therefore reduce, such other withholding tax. While
withholding under FATCA would also have applied to payments of
gross proceeds from the sale or other taxable disposition of the
Debentures, proposed U.S. Treasury regulations (upon which
taxpayers may rely until final regulations are issued) eliminate
FATCA withholding on payments of gross proceeds entirely. You
should consult your own tax advisors regarding these rules and
whether they may be relevant to your purchase, ownership and
disposition of the Debentures.
CERTAIN ERISA CONSIDERATIONS
The following is a summary of certain considerations associated
with the purchase of the Debentures by (i) “employee benefit plans”
within the meaning of Section 3(3) of the U.S. Employee Retirement
Income Security Act of 1974, as amended (“ERISA”) that are subject
to Title I of ERISA, (ii) plans, individual retirement accounts and
other arrangements as defined in and subject to Section 4975 of the
Code or (iii) employee benefit plans or plans that are subject to
provisions under any other U.S. or non-U.S. federal, state, local,
or other laws or regulations that are similar to such provisions of
ERISA or the Code (collectively, “Similar Laws”), and (iv) entities
whose underlying assets are considered to include the assets of any
such plan, account or arrangement described in clauses (i), (ii)
and (iii), pursuant to ERISA or otherwise (each of the foregoing
described in clauses (i), (ii), (iii) and (iv) referred to herein
as a “Plan”).
General Fiduciary Matters
ERISA and the Code impose certain duties on persons who are
fiduciaries of a Plan subject to Title I of ERISA or Section 4975
of the Code (a “Covered Plan”) and prohibit certain transactions
involving the assets of a Covered Plan and its fiduciaries or other
interested parties. Under ERISA and the Code, any person who
exercises any discretionary authority or control over the
administration of such a Covered Plan or the management or
disposition of the assets of such a Covered Plan, or who renders
investment advice for a fee or other compensation to such a Covered
Plan, is generally considered to be a fiduciary of the Covered
Plan.
In considering an investment in the Debentures of a portion of the
assets of any Plan, a fiduciary should determine whether the
investment is in accordance with the documents and instruments
governing the Plan and the applicable provisions of ERISA, Section
4975 of the Code or any Similar Laws relating to a fiduciary’s
duties to the Plan including, without limitation, the prudence,
diversification, delegation of control provisions of ERISA, the
prohibited transaction provisions of Section 406 of ERISA and
Section 4975 of the Code, or any provisions of Similar
Laws.
Prohibited Transaction Issues
Section 406 of ERISA and Section 4975 of the Code prohibit Covered
Plans from engaging in specified transactions involving plan assets
with persons or entities who are “parties in interest” within the
meaning of ERISA, or “disqualified persons” within the meaning of
Section 4975 of the Code, unless an exemption is available. A party
in interest or disqualified person who engaged in a non-exempt
prohibited transaction may be subject to excise taxes and other
penalties and liabilities under ERISA or the Code. In addition, the
fiduciary of the Covered Plan that caused the Covered Plan to
engage in such a non-exempt prohibited transaction may be subject
to penalties and liabilities under ERISA and the Code. The
acquisition, holding or disposition of Debentures by a Covered Plan
with respect to which the issuer or a remarketing agent or any of
their respective affiliates is considered a party in interest or a
disqualified person may constitute or result in a direct or
indirect prohibited transaction under Section 406 of ERISA and/or
Section 4975 of the Code, unless the investment is acquired, held
and disposed of in accordance with an applicable statutory, class
or individual prohibited transaction exemption. In this regard, the
U.S. Department of Labor (the “DOL”) has issued prohibited
transaction class exemptions, or “PTCEs” that may apply to the
acquisition, holding and disposition of the Debentures. These class
exemptions include, without limitation, PTCE 84-14 respecting
transactions determined by independent qualified professional asset
managers, PTCE 90-1 respecting insurance company pooled separate
accounts, PTCE 9 1-38 respecting bank collective investment funds.
PTCE 95-60 respecting life insurance company general accounts and
PTCE 96-23 respecting transactions determined by in-house asset
managers. In addition, Section 408(b)(17) of ERISA and Section
4975(d)(20) of the Code provide a statutory exemption for certain
transactions with persons that are parties in interest or
disqualified persons solely by reason of
providing services to the Plan. Each of the above-noted exemptions
contains conditions and limitations on its application. Fiduciaries
of Covered Plans considering acquiring, holding and disposing of
the Debentures in reliance on these or any other exemption should
carefully review the exemption to assure it is applicable. There
can be no assurance that all of the conditions of any such
exemption will be satisfied
or, even if all of the conditions specified therein were satisfied,
that any exemption would apply to all prohibited transactions that
may occur in connection with such investment.
Because of the foregoing, the Debentures should not be acquired,
held or disposed of by any person investing “plan assets” of any
Plan, unless such acquisition, holding and disposition will not
constitute a non-exempt prohibited transaction under Section 406 of
ERISA or Section 4975 of the Code or similar violation of any
applicable Similar Laws.
Plan Assets Issues
An additional issue concerns the extent to which assets of the
Issuer could be treated as subject to the fiduciary responsibility
or prohibited transaction issues of Title I of ERISA or Section
4975 of the Code. The DOL has issued regulations at 29 C.F.R
Section 2510.3-101, as modified by Section 3(42) of ERISA (the
“Plan Asset Regulations”) concerning the definition of what
constitutes the assets of a Covered Plan for purposes of the
fiduciary responsibility and prohibited transaction provisions of
Title I of ERISA and the prohibited transaction provisions of
Section 4975 of the Code. Under the Plan Asset Regulations,
generally when a Covered Plan acquires an “equity interest” in an
entity that is neither a “publicly offered security” (within the
meaning of the Plan Asset Regulations) nor a security issued by an
investment company registered under the Investment Company Act of
1940, as amended, the Covered Plan’s assets include both the equity
interest and an undivided interest in each of the underlying assets
of the entity, unless it is established either that less than 25%
of the total value of each class of equity interest in the entity
is held by “benefit plan investors” or that the entity is an
“operating company,” each as defined in the Plan Assets Regulation.
The Plan Asset Regulations defines an “equity interest” as any
interest in an entity other than an instrument that is treated as
indebtedness under applicable local law and which has no
substantial equity features. Under the Plan Asset Regulations, an
“operating company” is an entity that is primarily engaged,
directly or through a majority owned subsidiary or subsidiaries, in
the production or sale of a product or service other than the
investment of capital. Although there is no authority directly on
point and, therefore, the matter is not free from doubt, we believe
we should qualify as an “operating company” within the meaning of
the Plan Asset Regulations and consequently our assets should not
be considered to be “plan assets” of any Covered Plan.
As set forth in the discussion under the heading “Certain U.S.
Federal Income Tax Considerations,” while the matter is not
completely free from doubt, we believe that the Debentures are
indebtedness for U.S. federal income tax purposes, and we have
treated and will continue to treat the Debentures as subject to the
U.S. Treasury regulations governing contingent payment debt
instruments. Under the Plan Assets Regulation, the standard for
determining whether a security is to be treated as debt or equity
is based on whether the security is treated as indebtedness under
applicable local law and whether the security has any substantial
equity features. However, because there is no authority that
clarifies the relationship between the standards used for Plan
Asset Regulations purposes and the standards used for U.S. federal
income tax purposes in evaluating the proper characterization of a
security as debt or equity, each prospective investor should make
its own assessment as to whether or not the Debentures will be
treated as equity for purposes of the Plan Asset Regulations, and
should consult with its own legal advisors concerning the potential
consequences of the application of the Plan Asset Regulations, the
fiduciary responsibility provisions of ERISA, prohibited
transaction provisions of Title I of ERISA and Section 4975 of the
Code or any applicable Similar Law to an investment in the
Debentures with the assets of a Plan.
Representation
Accordingly, by acquiring, and holding a Debenture, each purchaser
and subsequent transferee of a Debenture will be deemed to have
represented and warranted that either (i) no portion of the assets
used by such purchaser or transferee to acquire and hold the
Debenture constitutes assets of any Plan or (ii) the acquisition,
holding and disposition of the Debenture by such purchaser or
transferee will not constitute or result in a non-exempt prohibited
transaction under Section 406 of ERISA or Section 4975 of the Code
or similar violation under any applicable Similar
Laws.
The foregoing discussion is general in nature and is not intended
to be all-inclusive. Due to the complexity of these rules and the
penalties that may be imposed upon persons involved in non-exempt
prohibited transactions, it is particularly important that
fiduciaries, or other persons considering purchasing Debentures on
behalf of, or with the assets of, any Plan, consult with their
counsel regarding the potential applicability of ERISA, Section
4975 of the Code and any Similar Laws to such investment and
whether an exemption under Section 406 of ERISA or Section 4975 of
the Code would be applicable to the acquisition, holding and
disposition of the Debentures or whether the acquisition, holding
and disposition of the Debentures would violate any applicable
Similar Laws.
Nothing herein shall be construed as a representation or
recommendation that such an investment meets all relevant legal
requirements with respect to investments by Plans generally or any
particular Plan or that such an investment is appropriate or
advisable for Plans generally or any particular Plan. Each
purchaser and holder of the Debentures have the exclusive
responsibility for ensuring that its acquisition, holding and
disposition of the Debentures complies with the fiduciary
responsibility rules of Title I of ERISA and does not violate the
prohibited transaction rules of ERISA or Section 4975 of the Code
or any applicable Similar Laws. Neither this discussion nor
anything provided in this prospectus supplement is or is intended
to be investment advice directed at any potential Plan purchasers
or at Plan purchasers generally and such purchasers of any
Debentures (or beneficial interests therein) should consult and
rely on their own advisors as to whether an investment in the
Debentures is suitable for the Plan.
REMARKETING
The remarketing is being made under the terms and subject to the
conditions contained in a remarketing agreement. This agreement
requires Barclays Capital Inc. and Wells Fargo Securities, LLC, as
the remarketing agents, to use their commercially reasonable
efforts to remarket the Debentures at a public offering price that
will result in proceeds sufficient to purchase the Treasury
portfolio at the treasury portfolio purchase price plus the
remarketing fee, as described under “Use of Proceeds.”
In connection with the remarketing, the remarketing agents reset
the interest rate on the Debentures to % per year.
The remarketing agents will receive a remarketing fee as set forth
on the cover of this prospectus supplement.
The remarketing agents have no obligation to purchase any of the
Debentures. The supplemental remarketing agreement provides that
the remarketing is subject to certain conditions.
The remarketing agents may reject any or all offers for the
Debentures. After the initial public offering of the Debentures
pursuant to the remarketing, the remarketing agents may change the
offering price and other selling terms of the
Debentures.
The expenses associated with the remarketing of the Debentures are
expected to be approximately $ .
We do not intend to apply to list the Debentures on a securities
exchange. The remarketing agents have advised us that they intend
to make a market in the Debentures but are not obligated to do so
and may discontinue such market-making activities at any time
without notice. We cannot give any assurance as to the maintenance
of the trading market for, or the liquidity of, the
Debentures.
We have agreed to indemnify the remarketing agents against certain
liabilities, including liabilities under the Securities Act of
1933, as amended, or contribute to payments that each remarketing
agent may be required to make in respect thereof.
In connection with the remarketing, the remarketing agents may
purchase and sell the Debentures in the open market. These
transactions may include short sales and stabilizing transactions
and purchases to cover syndicate short positions created in
connection with the offering. Stabilizing transactions consist of
certain bids or purchases for the purposes of preventing or
retarding a decline in the market price of the Debentures and
syndicate short positions involve the sale by the remarketing
agents of a greater number of Debentures than they are required to
purchase from us in the offering. The remarketing agents also may
impose a penalty bid, whereby selling concessions allowed to
syndicate members or other broker dealers in respect of the
securities sold in the offering for their account may be reclaimed
by the syndicate if such Debentures are repurchased by the
syndicate in stabilizing or covering transactions. These activities
may stabilize, maintain or otherwise affect the market price of the
Debentures, which may be higher than the price that might otherwise
prevail in the open market; and these activities, if commenced, may
be discontinued at any time. These transactions may be effected in
the over-the-counter market or otherwise.
Some of the remarketing agents or their affiliates engage in
transactions with, and have performed services for, us and our
affiliates in the ordinary course of business and have, from time
to time, performed, and may in the future perform, various
financial advisory and investment banking services for us, for
which they received or will receive customary fees and
expenses.
In addition, in the ordinary course of their business activities,
the remarketing agents and their affiliates may make or hold a
broad array of investments and actively trade debt and equity
securities (or related derivative securities) and financial
instruments (including bank loans) for their own account and for
the accounts of their customers. Such investments and securities
activities may involve securities and/
or instruments of ours or our affiliates. If any of the remarketing
agents or their affiliates have a lending relationship with us,
certain of those remarketing agents or their affiliates routinely
hedge, and certain other of those remarketing agents or their
affiliates may hedge, their credit exposure to us consistent with
their customary risk management policies. Typically, these
remarketing agents and their affiliates would hedge such exposure
by entering into transactions which consist of either the purchase
of credit default swaps or the creation of short positions in our
securities, including potentially the notes offered hereby. Any
such credit default swaps or short positions could adversely affect
future trading prices of the notes offered hereby. The remarketing
agents and their affiliates may also make investment
recommendations and/or publish or express independent research
views in respect of such securities or financial instruments and
may hold, or recommend to clients that they acquire, long and/or
short positions in such securities and instruments.
Selling Restrictions
Notice to Prospective Investors in the European Economic Area
(“EEA”)
The Debentures are not intended to be offered, sold or otherwise
made available to and should not be offered, sold or otherwise made
available to any retail investor in the European Economic Area
(“EEA”). For these purposes, a retail investor means a person who
is one (or more) of: (i) a retail client as defined in point (11)
of Article 4(1) of Directive 2014/65/EU (as amended, “MiFID II”);
or (ii) a customer within the meaning of Directive (EU) 2016/97 as
amended, where that customer would not qualify as a professional
client as defined in point (10) of Article 4(1) of MiFID II; or
(iii) not a qualified investor as defined in Regulation (EU)
2017/1129 (as amended, the “Prospectus Regulation”). Consequently
no key information document required by Regulation (EU) No
1286/2014 (as amended, the “PRIIPs Regulation”) for offering or
selling the Debentures or otherwise making them available to retail
investors in the EEA has been prepared and therefore offering or
selling the Debentures or otherwise making them available to any
retail investor in the EEA may be unlawful under the PRIIPs
Regulation. This prospectus supplement and the accompanying
prospectus have been prepared on the basis that any offer of the
Debentures in any member state of the EEA will be made pursuant to
an exemption under the Prospectus Regulation from the requirement
to publish a prospectus for offers of the Debentures. Neither this
prospectus supplement nor the accompanying prospectus are
prospectuses for purposes of the Prospectus
Regulation.
Notice to Prospective Investors in the United Kingdom
The Debentures are not intended to be offered, sold or otherwise
made available to and should not be offered, sold or otherwise made
available to any retail investor in the United Kingdom (“UK”). For
these purposes, a retail investor means a person who is one (or
more) of: (i) a retail client, as defined in point (8) of Article 2
of Regulation (EU) No 2017/565 as it forms part of domestic law by
virtue of the European Union (Withdrawal) Act 2018 (“EUWA”); (ii) a
customer within the meaning of the provisions of the Financial
Services and Markets Act 2000 (as amended, the “FSMA”) and any
rules or regulations made under the FSMA to implement Directive
(EU) 2016/97, where that customer would not qualify as a
professional client, as defined in point (8) of Article 2(1) of
Regulation (EU) No 600/2014 as it forms part of domestic law by
virtue of the EUWA; or (iii) not a qualified investor as defined in
Article 2 of Regulation (EU) 2017/1129 as it forms part of domestic
law by virtue of the EUWA (the “UK Prospectus Regulation”).
Consequently no key information document required by Regulation
(EU) No 1286/2014 as it forms part of domestic law by virtue of the
EUWA (the “UK PRIIPs Regulation”) for offering or selling the
Debentures or otherwise making them available to retail investors
in the UK has been prepared and therefore offering or selling the
Debentures or otherwise making them available to any retail
investor in the UK may be unlawful under the UK PRIIPs
Regulation.
In the UK, this prospectus supplement and the accompanying
prospectus are being distributed only to, and is directed only at,
and any offer subsequently made may only be directed at persons who
are “qualified investors” (as defined in the UK Prospectus
Regulation) (i) who have professional experience in matters
relating to investments falling within Article 19 (5) of the
Financial Services and Markets Act 2000 (Financial Promotion) Order
2005, as amended (the “Order”) and/or (ii) who are high net worth
companies (or persons to whom it may otherwise be lawfully
communicated) falling within Article 49(2)(a) to (d) of the Order
(all such persons together being referred to as “relevant
persons”). This prospectus supplement and accompanying prospectus
must not be acted on or relied on in the UK by persons who are not
relevant persons. In the UK, any investment or investment activity
to which this prospectus supplement and accompanying prospectus
relates is only available to, and will be engaged in with, relevant
persons.
Each remarketing agent has represented and agreed
that:
•it
has only communicated or caused to be communicated and will only
communicate or cause to be communicated an invitation or inducement
to engage in investment activity (within the meaning of Section 21
of the FSMA) received by it in connection with the issue or sale of
the Debentures in circumstances in which Section 21(1) of the FSMA
does not apply to the Company; and
•it
has complied and will comply with all applicable provisions of the
FSMA with respect to anything done by it in relation to the
Debentures in, from or otherwise involving the UK.
Notice to Prospective Investors in Canada
The Debentures may be sold only to purchasers purchasing, or deemed
to be purchasing, as principal that are accredited investors, as
defined in National Instrument 45-106 Prospectus Exemptions or
subsection 73.3(1) of the Securities Act (Ontario), and are
permitted clients, as defined in National Instrument 31-103
Registration Requirements, Exemptions and Ongoing Registrant
Obligations. Any resale of the Debentures must be made in
accordance with an exemption from, or in a transaction not subject
to, the prospectus requirements of applicable securities
laws.
Securities legislation in certain provinces or territories of
Canada may provide a purchaser with remedies for rescission or
damages if this prospectus supplement and the accompanying
prospectus (including any amendment thereto) contains a
misrepresentation, provided that the remedies for rescission or
damages are exercised by the purchaser within the time limit
prescribed by the securities legislation of the purchaser’s
province or territory. The purchaser should refer to any applicable
provisions of the securities legislation of the purchaser’s
province or territory for particulars of these rights or consult
with a legal advisor.
Pursuant to section 3A.3 of National Instrument 33-105 Underwriting
Conflicts (NI 33-105), the remarketing agents are not required to
comply with the disclosure requirements of NI 33-105 regarding
remarketing agent conflicts of interest in connection with the
offering.
Notice to Prospective Investors in Switzerland
This prospectus supplement and the accompanying prospectus are not
intended to constitute an offer or solicitation to purchase or
invest in the Debentures. The Debentures may not be publicly
offered, directly or indirectly, in Switzerland within the meaning
of the Swiss Financial Services Act (“FinSA”) and no application
has or will be made to admit the Debentures to trading on any
trading venue (exchange or multilateral trading facility) in
Switzerland. Neither this prospectus supplement, the
accompanying
prospectus nor any other offering or marketing material relating to
the Debentures constitutes a prospectus pursuant to the FinSA, and
neither this prospectus supplement, the accompanying prospectus nor
any other offering or marketing material relating to the Debentures
may be publicly distributed or otherwise made publicly available in
Switzerland.
Notice to Prospective Investors in the Republic of South
Korea
The Debentures have not been and will not be registered with the
Financial Services Commission of Korea under the Financial
Investment Services and Capital Markets Act of Korea. Accordingly,
the Debentures have not been and will not be offered, sold or
delivered, directly or indirectly, in Korea or to, or for the
account or benefit of, any resident of Korea (as defined in the
Foreign Exchange Transactions Law of Korea and its Enforcement
Decree) or to others for re-offering or resale, except as otherwise
permitted by applicable Korean laws and regulations. In addition,
within one year following the issuance of the Debentures, the
Debentures may not be transferred to any resident of Korea other
than a qualified institutional buyer (as such term is defined in
the regulation on issuance, public disclosure, etc. of securities
of Korea, a “Korean QIB”) registered with the Korea Financial
Investment Association (the “KOFIA”) as a Korean QIB and subject to
the requirement of monthly reports with the KOFIA of its holding of
Korean QIB bonds as defined in the Regulation on Issuance, Public
Disclosure, etc. of notes of Korea, provided that (a) the
Debentures are denominated, and the principal and interest payments
thereunder are made, in a currency other than Korean won, (b) the
amount of the securities acquired by such Korean QIBs in the
primary market is limited to less than 20 percent of the aggregate
issue amount of the Debentures, (c) the Debentures are listed on
one of the major overseas securities markets designated by the
Financial Supervisory Service of Korea, or certain procedures, such
as registration or report with a foreign financial investment
regulator, have been completed for offering of the securities in a
major overseas securities market, (d) the one-year restriction on
offering, delivering or selling of securities to a Korean resident
other than a Korean QIB is expressly stated in the securities, the
relevant purchase agreement, subscription agreement, and the
offering circular and (e) the Company and the remarketing agents
shall individually or collectively keep the evidence of fulfillment
of conditions (a) through (d) above after having taken necessary
actions therefor.
Notice to Prospective Investors in Hong Kong
The Debentures have not been offered and will not be offered or
sold in Hong Kong by means of any document other than (i) in
circumstances which do not constitute an offer to the public within
the meaning of the Companies (Winding Up and Miscellaneous
Provisions) Ordinance (Cap. 32, Laws of Hong Kong), (ii) to
“professional investors” within the meaning of the Securities and
Futures Ordinance (Cap. 571, Laws of Hong Kong) and any rules made
thereunder or (iii) in other circumstances which do not result in
the document being a “prospectus” within the meaning of the
Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap.
32, Laws of Hong Kong) and no advertisement, invitation or document
relating to the Debentures may be issued or has been or may be in
the possession of any person for the purpose of issue (in each case
whether in Hong Kong or elsewhere), which is directed at, or the
contents of which are likely to be accessed or read by, the public
in Hong Kong (except if permitted to do so under the securities
laws of Hong Kong) other than with respect to Debentures which are
or are intended to be disposed of only to persons outside Hong Kong
or only to “professional investors” within the meaning of the
Securities and Futures Ordinance (Cap. 571, Laws of Hong Kong) and
any rules made thereunder.
Notice to Prospective Investors in Japan
The Debentures have not been and will not be registered under the
Financial Instruments and Exchange Law of Japan (Law No. 25 of
1948, as amended) (the “Financial Instruments and Exchange Law”),
and the Debentures have not been offered or sold and will not be
offered or sold, directly or indirectly, in Japan or to, or for the
account of or benefit of, any resident of Japan (which term as used
herein means any person resident in Japan, including any
corporation or other entity organized under the laws of Japan), or
to others for re-offering or resale, directly or indirectly, in
Japan or to, or for the account or benefit of any resident of
Japan, except pursuant to an exemption from the registration
requirements of, and otherwise in compliance with, the Financial
Instruments and Exchange Law and any other applicable laws,
regulations and guidelines promulgated by the relevant Japanese
governmental and regulatory authorities and in effect at the
relevant time.
Notice to Prospective Investors in Taiwan
The Debentures have not been and will not be registered with the
Financial Supervisory Commission of Taiwan, the Republic of China
(“Taiwan”), pursuant to relevant securities laws and regulations
and may not be offered or sold in Taiwan through a public offering
or in any manner which would constitute an offer within the meaning
of the Securities and Exchange Act of Taiwan or would otherwise
require registration with or the approval of the Financial
Supervisory Commission of Taiwan. No person or entity in Taiwan has
been authorized to offer, sell, give advice regarding or otherwise
intermediate the offering or sale of the Debentures in
Taiwan.
Notice to Prospective Investors in Singapore
This prospectus supplement has not been registered as a prospectus
with the Monetary Authority of Singapore. Accordingly, this
prospectus supplement and any other document or material in
connection with the offer or sale, or invitation for subscription
or purchase, of the Debentures may not be circulated or
distributed, nor may the Debentures be offered or sold, or be made
the subject of an invitation for subscription or purchase, whether
directly or indirectly, to persons in Singapore other than (i) to
an institutional investor under Section 274 of the Securities and
Futures Act, Chapter 289 of Singapore (the “SFA”), (ii) to a
relevant person pursuant to Section 275(I), or any person pursuant
to Section 275(1A), and in accordance with the conditions specified
in Section 275 of the SFA or (iii) otherwise pursuant to, and in
accordance with the conditions of, any other applicable provision
of the SFA, in each case subject to compliance with conditions set
forth in the SFA.
Where the Debentures are subscribed or purchased under Section 275
of the SFA by a relevant person which is:
•a
corporation (which is not an accredited investor (as defined in
Section 4A of the SFA)) the sole business of which is to hold
investments and the entire share capital of which is owned by one
or more individuals, each of whom is an accredited investor;
or
•a
trust (where the trustee is not an accredited investor) of that
corporation or the beneficiaries’ rights and each beneficiary of
the trust is an individual who is an accredited
investor,
shares, debentures and units of shares and debentures of that
corporation or the beneficiaries’ rights and interest (howsoever
described) in that trust shall not be transferred within six months
after that corporation or that trust has acquired the Debentures
pursuant to an offer made under Section 275 of the SRA
except
•to
an institutional investor (for corporations, under Section 274 of
the SFA) or to a relevant person defined in Section 275(2) of the
SFA, or to any person pursuant to an offer that is made on terms
that such shares, debentures and units of shares and debentures of
that corporation or such rights
and interest in that trust are acquired at a consideration of not
less than S$200,000 (or its equivalent in a foreign currency) for
each transaction, whether such amount is to be paid for in cash or
by exchange of securities or other assets, and further for
corporations, in accordance with the conditions specified in
Section 275 of the SFA;
•where
no consideration is or will be given for the transfer;
or
•where
the transfer is by operation of law.
Singapore SFA Product Classification—In connection with Section
309B of the SFA and the CMP Regulations 2018, unless otherwise
specified before an offer of notes, we have determined, and hereby
notify all relevant persons (as defined in Section 309A(1) of the
SFA) that the notes are “prescribed capital markets products” (as
defined in the CMP Regulations 2018) and Excluded Investment
Products (as defined in MAS Notice SFA 04-N12: Notice on the Sale
of Investment Products and MAS Notice FAA-N16: Notice on
Recommendations on Investment Products).
LEGAL MATTERS
Certain legal matters with respect to this remarketing of the
Debentures will be passed on for us by David C. House, Esq.,
Associate General Counsel of American Electric Power Service
Corporation, one of our affiliates, or William E. Johnson, Esq.,
Senior Counsel of American Electric Power Service Corporation, or
Ryan F. Aguiar, Esq., Counsel of American Electric Power Service
Corporation and by Simpson Thacher & Bartlett LLP, Houston,
Texas and New York, New York. Certain legal matters with respect to
the remarketing of the Debentures will be passed on for the
remarketing agents by Hunton Andrews Kurth LLP, New York, New York.
From time to time, Hunton Andrews Kurth LLP acts as counsel to our
affiliates for some matters.
EXPERTS
The financial statements and management’s assessment of the
effectiveness of internal control over financial reporting (which
is included in Management’s Report on Internal Control over
Financial Reporting) incorporated in this Prospectus Supplement by
reference to the
Annual Report on Form 10-K for the year ended December 31,
2020
have been so incorporated in reliance on the report of
PricewaterhouseCoopers LLP, an independent registered public
accounting firm, given on the authority of said firm as experts in
auditing and accounting.
PROSPECTUS
AMERICAN ELECTRIC POWER COMPANY, INC.
1 RIVERSIDE PLAZA
COLUMBUS, OHIO 43215
(614) 716-1000
SENIOR NOTES
COMMON STOCK
JUNIOR SUBORDINATED DEBENTURES
STOCK PURCHASE CONTRACTS
STOCK PURCHASE UNITS
TERMS OF SALE
This prospectus contains summaries of the general terms of the
securities. You will find the specific terms of these securities,
and the manner in which they are being offered, in supplements to
this prospectus. You should read this prospectus and the available
prospectus supplement carefully before you invest.
The common stock of American Electric Power Company, Inc. is listed
on the NASDAQ Stock Market LLC under the symbol "AEP". The last
reported sale of the common stock on the NASDAQ Stock Market LLC on
November 5, 2020 was $90.71 per share.
In this prospectus, unless the context indicates otherwise, the
words "we", "ours" and "us" refer to American Electric Power
Company, Inc. and its consolidated subsidiaries.
INVESTING IN THESE SECURITIES INVOLVES RISKS. SEE THE SECTION
ENTITLED “RISK FACTORS” BEGINNING ON PAGE 2 FOR MORE
INFORMATION.
The securities have not been approved or disapproved by the
Securities and Exchange Commission or any state securities
commission, nor have these organizations determined that this
prospectus is accurate or complete. Any representation to the
contrary is a criminal offense.
The date of this prospectus is November 6, 2020.
RISK FACTORS
Investing in our securities involves risk. Please see the risk
factors described in our most recent Annual Report on Form 10-K and
all subsequent Quarterly Reports on Form 10-Q, which are
incorporated by reference in this prospectus. Before making an
investment decision, you should carefully consider these risks as
well as other information contained or incorporated by reference in
this prospectus. The risks and uncertainties described are those
presently known to us.
THE COMPANY
We are a public utility holding company that owns, directly or
indirectly, all of the outstanding common stock of our domestic
electric utility subsidiaries and varying percentages of other
subsidiaries. Substantially all of our operating revenues derive
from the furnishing of electric service. We were incorporated under
the laws of New York in 1906 and reorganized in 1925. Our principal
executive offices are located at 1 Riverside Plaza, Columbus, Ohio
43215, and our telephone number is (614) 716-1000.
We own, directly or indirectly, all the outstanding common stock of
the following operating public utility companies: AEP Texas Inc.,
Appalachian Power Company, Indiana Michigan Power Company, Kentucky
Power Company, Kingsport Power Company, Ohio Power Company, Public
Service Company of Oklahoma, Southwestern Electric Power Company
and Wheeling Power Company. These operating public utility
companies supply electric service in portions of Arkansas, Indiana,
Kentucky, Louisiana, Michigan, Ohio, Oklahoma, Tennessee, Texas,
Virginia and West Virginia. We also own all of the membership
interests of AEP Transmission Holding Company, LLC, a holding
company for our transmission operation joint ventures and for seven
transmission-only electric utilities, each of which is
geographically aligned with our utility operations.
PROSPECTUS SUPPLEMENTS
We will provide information to you about the securities in up to
three separate documents that progressively provide more detail:
(a) this prospectus provides general information some of which may
not apply to your securities, (b) the accompanying prospectus
supplement provides more specific terms of your securities, and (c)
the pricing supplement, if any, provides the final terms of your
securities. It is important for you to consider the information
contained in this prospectus, the prospectus supplement, and the
pricing supplement, if any, in making your investment
decision.
WHERE YOU CAN FIND MORE INFORMATION
This prospectus is part of a registration statement we filed with
the Securities and Exchange Commission (“SEC”). We also file
annual, quarterly and current reports and other information with
the SEC. You may examine our SEC filings through the SEC’s website
at http://www.sec.gov.
The SEC allows us to “incorporate by reference” the information we
file with them, which means that we can disclose important
information to you by referring you to those documents. The
information incorporated by reference is considered to be part of
this prospectus, and later information that we file with the SEC
will automatically update and supersede this information. We
incorporate by reference the documents listed below and any future
filings made with the SEC under Sections 13(a), 13(c), 14, or 15(d)
of the Securities Exchange Act of 1934 (including any documents
filed after the date of the initial registration statement and
prior to its effectiveness) until we sell all the
securities.
•Annual
Report on
Form 10-K
for the year ended December 31, 2019;
•Current
Reports on Form 8-K filed
March 5, 2020,
March 23, 2020,
March 30, 2020,
April 22, 2020,
August 17, 2020,
September 15, 2020
and
November 2, 2020
and Current Report on Form 8-K/A filed
September 16, 2020,
which amended Current Report on Form 8-K filed September 15,
2020.
You may request a copy of these filings, at no cost, by writing or
telephoning us at the following address:
Investor Relations
American Electric Power Service Corporation
1 Riverside Plaza
Columbus, Ohio 43215
614-716-1000
You should rely only on the information incorporated by reference
or provided in this prospectus or any supplement to this prospectus
and in any written communication from us or any underwriters
specifying the final terms of the particular offering. We have not
authorized anyone else to provide you with different information.
We are not making an offer of these securities in any state where
the offer is not permitted. You should not assume that the
information in this prospectus or any supplement to this prospectus
is accurate as of any date other than the date on the front of
those documents.
USE OF PROCEEDS
Unless otherwise stated in a prospectus supplement, the net
proceeds from the sale of any of the offered securities will be
used for general corporate purposes relating to our business. These
purposes may include redeeming or repurchasing outstanding debt,
replenishing working capital, and financing our subsidiaries'
ongoing construction and maintenance programs. If we do not use the
net proceeds immediately, we will temporarily invest them in
short-term, interest-bearing obligations. At September 30, 2020 we
had $1.65 billion in short-term debt outstanding.
The prospectus supplement of a particular offering of securities
will identify the use of proceeds for the offering.
DESCRIPTION OF THE SENIOR NOTES
General
We will issue the Senior Notes directly to the public, to a trust
or as part of a Stock Purchase Unit, under an Indenture dated May
1, 2001 (as previously supplemented and amended, the “Indenture”)
between us and The Bank of New York Mellon Trust Company, N.A. (as
successor to The Bank of New York), as trustee (the “Trustee”).
This prospectus briefly outlines some provisions of the Indenture.
If you would like more information on these provisions, you should
review the Indenture and any supplemental indentures or company
orders that we have filed or will file with the SEC. See
Where You Can Find More Information
on page 2 on how to locate these documents. You may also review
these documents at the Trustee’s offices at 2 North LaSalle Street,
Chicago, Illinois.
The Indenture does not limit the amount of Senior Notes that may be
issued. The Indenture permits us to issue Senior Notes in one or
more series or tranches upon the approval of our board of directors
and as described in one or more company orders or supplemental
indentures. Each series of Senior Notes may differ as to their
terms. The Indenture also gives us the ability to reopen a previous
issue of a series of Senior Notes and issue additional Senior Notes
of such series.
Because we are a holding company, the claims of creditors of our
subsidiaries will have a priority over our equity rights and the
rights of our creditors (including the holders of the Senior Notes)
to participate in the assets of the subsidiary upon the
subsidiary's liquidation.
The Senior Notes are unsecured and will rank equally with all our
unsecured unsubordinated debt. For current information on our debt
outstanding see our most recent Form 10-K and 10-Q. See
Where You Can Find More Information.
Pricing or prospectus supplement will include the final terms for
each Senior Note. If we decide to list upon issuance any Senior
Note or Senior Notes on a securities exchange, a pricing or
prospectus supplement will identify the exchange and state when we
expect trading could begin. The following terms of the Senior Notes
that we may sell at one or more times will be established in the
applicable pricing or prospectus supplement:
- Maturity
- Fixed
or floating interest rate
- Remarketing
features
- Certificate
or book-entry form
- Redemption
- Not
convertible, amortized or subject to a sinking fund
- Interest
paid on fixed rate Senior Notes quarterly or
semi-annually
- Interest
paid on floating rate Senior Notes monthly, quarterly,
semi-annually, or annually
- Issued
in multiples of a minimum denomination
- Ability
to defer payment of interest
- Any
other terms not inconsistent with the Indenture
- Issued
with Original Issue Discount
The Senior Notes will be denominated in U.S. dollars and we will
pay principal and interest in U.S. dollars. Unless an applicable
pricing or prospectus supplement states otherwise, the Senior Notes
will not be subject to any conversion, amortization, or sinking
fund. We expect that the Senior Notes issued to the public will be
"book-entry," represented by a permanent global Senior Note
registered in the
name of Cede & Co., The Depository Trust Company’s partnership
nominee or such other name as may be requested by an authorized
representative of DTC. We reserve the right, however, to issue
Senior Note certificates registered in the name of the Senior
Noteholders.
In the discussion that follows, whenever we talk about paying
principal on the Senior Notes, we mean at maturity or redemption.
Also, in discussing the time for notices and how the different
interest rates are calculated, all times are New York City time and
all references to New York mean The City of New York, unless
otherwise noted.
The Indenture does not protect holders of the Senior Notes if we
engage in a highly leveraged transaction.
The following terms may apply to each Senior Note as specified in
the applicable pricing or prospectus supplement and the Senior
Note:
Redemptions
If we issue redeemable Senior Notes, we may redeem such Senior
Notes at our option unless an applicable pricing or prospectus
supplement states otherwise. The pricing or prospectus supplement
will state the terms of redemption. We may redeem Senior Notes in
whole or in part by delivering written notice to the Senior
Noteholders no more than 60, and not less than 30, days prior to
redemption. If we do not redeem all the Senior Notes of a series at
one time, DTC (as defined herein), in the case of Senior Notes
represented by a global security, will select the particular Senior
Notes or portions thereof for redemption from the outstanding
Senior Notes not previously redeemed in accordance with applicable
procedures of DTC. If Senior Note certificates are outstanding, the
Trustee selects the Senior Notes to be redeemed by lot or in such
other manner it determines to be fair.
Remarketed Notes
If we issue Senior Notes with remarketing features, an applicable
pricing or prospectus supplement will describe the terms for the
Senior Notes including: interest rate, remarketing provisions, our
right to purchase or redeem Senior Notes, the holders' right to
tender Senior Notes, and any other provisions.
Note Certificates-Registration, Transfer, and Payment of Interest
and Principal
Unless otherwise indicated in the applicable prospectus supplement,
each series of Senior Notes issued to the public will be issued
initially in the form of one or more global notes, in registered
form, without coupons, as described under
Book-Entry System.
However, if we issue Senior Note certificates, they will be
registered in the name of the Senior Noteholder. The Senior Notes
may be transferred or exchanged, pursuant to administrative
procedures in the Indenture, without the payment of any service
charge (other than any tax or other governmental charge) by
contacting the paying agent. Payments to public holders of Senior
Note certificates will be made by check or by wire transfer to an
account located in the United States maintained by the person
entitled thereto as specified in the security
register.
Original Issue Discount
We may issue the Senior Notes at an original issue discount,
bearing no interest or bearing interest at a rate that, at the time
of issuance, is below market rate, to be sold at a substantial
discount below their stated principal amount. Generally speaking,
if the Senior Notes are issued at an original issue discount and
there is an event of default or acceleration of their maturity,
holders will receive an amount less than
their principal amount. Tax and other special considerations
applicable to original issue discount debt will be described in the
prospectus supplement in which we offer those Senior
Notes.
Interest Rate
The interest rate on the Senior Notes will either be fixed or
floating. The interest paid will include interest accrued to, but
excluding, the date of maturity or redemption. Interest is
generally payable to the person in whose name the Senior Note is
registered at the close of business on the record date before each
interest payment date. Interest payable at maturity or redemption,
however, will be payable to the person to whom principal is
payable.
If we issue a Senior Note after a record date but on or prior to
the related interest payment date, we will pay the first interest
payment on the interest payment date after the next record date. We
will pay interest payments by check or wire transfer, at our
option.
Fixed Rate Senior Notes
A pricing or prospectus supplement will designate the record dates,
payment dates, our ability to defer interest payments and the fixed
rate of interest payable on a Senior Note. We will pay interest
quarterly or semi-annually, and upon maturity or redemption. Unless
an applicable pricing or prospectus supplement states otherwise, if
any payment date falls on a day that is not a business day, we will
pay interest on the next business day and no additional interest
will be paid. Interest payments will be the amount of interest
accrued to, but excluding, each payment date. Interest will be
computed using a 360-day year of twelve 30-day months.
Floating Rate Notes
Each floating rate Senior Note will have an interest rate formula.
The applicable pricing or prospectus supplement will state the
initial interest rate or interest rate formula on each Senior Note
effective until the first interest reset date. The applicable
pricing or prospectus supplement will state the method and dates on
which the interest rate will be determined, reset and
paid.
Events of Default
The following are events of default under the Indenture with
respect to any series of Senior Notes, unless we state otherwise in
the applicable prospectus supplement:
- failure
to pay for three business days the principal of (or premium, if
any, on) any Senior Note of a series when due and
payable;
- failure
to pay for 30 days any interest on any Senior Note of any series
when due and payable;
- failure
to perform any other requirements in such Senior Notes, or in the
Indenture in regard to such Senior Notes, for 90 days after
notice;
- certain
events of our bankruptcy or insolvency; or
- any
other event of default specified in a series of Senior
Notes.
An event of default for a particular series of Senior Notes does
not necessarily mean that an event of default has occurred for any
other series of Senior Notes issued and outstanding under the
Indenture. If an event of default occurs and continues, the Trustee
or the holders of at least 33% of the principal amount of the
Senior Notes of the series affected may require us to repay the
entire principal of the Senior Notes of such series immediately
("Repayment Acceleration"). In most instances, the holders of at
least a
majority in aggregate principal amount of the Senior Notes of the
affected series may rescind a previously triggered Repayment
Acceleration. However, if we cause an event of default because we
have failed to pay (unaccelerated) principal, premium, if any, or
interest, Repayment Acceleration may be rescinded only if we have
first cured our default by depositing with the Trustee enough money
to pay all (unaccelerated) past due amounts and penalties, if
any.
Subject to certain exceptions, the Trustee must within 90 days
after a default occurs, notify the holders of the Senior Notes of
the series of default unless such default has been cured or waived.
We are required to file an annual certificate with the Trustee,
signed by an officer, concerning any default by us under any
provisions of the Indenture.
Subject to the provisions of the Indenture relating to its duties
in case of default, the Trustee shall be under no obligation to
exercise any of its rights or powers under the Indenture at the
request, order or direction of any holders unless such holders
offer the Trustee reasonable indemnity. Subject to the provisions
for indemnification, the holders of a majority in principal amount
of the Senior Notes of any series may direct the time, method and
place of conducting any proceedings for any remedy available to, or
exercising any trust or power conferred on, the Trustee with
respect to such Senior Notes.
Modification of Indenture
Under the Indenture, our rights and obligations and the rights of
the holders of any Senior Notes may be changed. Any change
affecting the rights of the holders of any series of Senior Notes
requires the consent of the holders of not less than a majority in
aggregate principal amount of the outstanding Senior Notes of all
series affected by the change, voting as one class. However, we
cannot change the terms of payment of principal or interest, or
reduce the percentage required for changes or a waiver of default,
unless the holder consents. We may issue additional series of
Senior Notes and take other action that does not affect the rights
of holders of any series by executing supplemental indentures
without the consent of any Senior Noteholders.
Consolidation, Merger or Sale
We may merge or consolidate with any entity or sell substantially
all of our assets as an entirety as long as the successor or
purchaser (i) is organized and existing under the laws of the
United States, any state thereof or the District of Columbia and
(ii) expressly assumes the payment of principal, premium, if any,
and interest on the Senior Notes.
Legal Defeasance
We will be discharged from our obligations on the Senior Notes of
any series at any time if:
- we
deposit with the Trustee sufficient cash or government securities
to pay the principal, interest, any premium and any other sums due
to the stated maturity date or a redemption date of the Senior Note
of the series, and
- we
deliver to the Trustee an opinion of counsel stating that the
federal income tax obligations of Senior Noteholders of that series
will not change as a result of our performing the action described
above.
If this happens, the Senior Noteholders of the series will not be
entitled to the benefits of the Indenture except for registration
of transfer and exchange of Senior Notes and replacement of lost,
stolen or mutilated Senior Notes.
Covenant Defeasance
We will be discharged from our obligations under any restrictive
covenant applicable to the Senior Notes of a particular series if
we perform both actions described above. See
Legal Defeasance.
If this happens, any later breach of that particular restrictive
covenant will not result in Repayment Acceleration. If we cause an
event of default apart from breaching that restrictive covenant,
there may not be sufficient money or government obligations on
deposit with the Trustee to pay all amounts due on the Senior Notes
of that series. In that instance, we would remain liable for such
amounts.
Governing Law
The Indenture and Senior Notes of all series will be governed by
the laws of the State of New York.
Concerning the Trustee
We and our affiliates use or will use some of the banking services
of the Trustee in the normal course of business. The Trustee is
also the Subordinated Indenture Trustee under the Subordinated
Indenture relating to the Junior Subordinated
Debentures.
DESCRIPTION OF COMMON STOCK
Our authorized capital stock currently consists of 600,000,000
shares of common stock, par value $6.50 per share. 496,389,534
shares of our common stock were issued and outstanding as of
November 5, 2020. Our common stock, including the common stock
offered in this prospectus once issued, is listed on the NASDAQ
Stock Market LLC. Computershare Trust Company, N.A., P.O. Box
43081, Providence, Rhode Island 02940-3081, is the transfer agent
and registrar for our common stock.
Dividend Rights
The holders of our common stock are entitled to receive the
dividends declared by our board of directors provided funds are
legally available for such dividends. Our income derives from our
common stock equity in the earnings of our subsidiaries. Various
financing arrangements and regulatory requirements may impose
certain restrictions on the ability of our subsidiaries to transfer
funds to us in the form of cash dividends, loans or
advances.
Voting Rights
The holders of our common stock are entitled to one vote for each
share of common stock held.
Pre-emptive Rights
The holders of our common stock do not have the right to subscribe
for or purchase any part of any new or additional issue of our
common stock.
Rights Upon Liquidation
If we are liquidated, holders of our common stock will be entitled
to receive pro rata all assets available for distribution to our
shareholders after payment of our liabilities, including
liquidation expenses.
Restrictions on Dealing with Existing Shareholders
We are subject to Section 513 of New York's Business Corporation
Law, which provides that no domestic corporation may purchase or
agree to purchase more than 10% of its stock from a shareholder who
has held the shares for less than two years at any price that is
higher than the market price unless the transaction is approved by
both the corporation's board of directors and a majority of the
votes of all outstanding shares entitled to vote thereon at a
meeting of shareholders, unless the certificate of incorporation
requires a greater percentage of the votes of the outstanding
shares to approve or the corporation offers to purchase shares from
all the holders on the same terms. Our certificate of incorporation
does not currently provide for a higher percentage.
DESCRIPTION OF THE JUNIOR SUBORDINATED DEBENTURES
General
We will issue the Junior Subordinated Debentures directly to the
public, to a trust or as part of a Stock Purchase Unit under the
Junior Subordinated Indenture dated March 1, 2008 (the
“Subordinated Indenture”) between us and the Subordinated Indenture
Trustee. This prospectus briefly outlines some provisions of the
Subordinated Indenture. If you would like more information on these
provisions, you should review the Subordinated Indenture and any
supplemental indentures or company orders that we will file with
the SEC. See
Where You Can Find More Information
on how to locate these documents. You may also review these
documents at the Subordinated Indenture Trustee’s offices at 2
North LaSalle Street, Chicago, Illinois.
The Junior Subordinated Debentures are unsecured obligations and
are junior in right of payment to "Senior Indebtedness". You may
find a description of the subordination provisions of the Junior
Subordinated Debentures, including a description of Senior
Indebtedness under
Subordination.
Because we are a holding company, the claims of creditors of our
subsidiaries will have a priority over our equity rights and the
rights of our creditors (including the holders of the Junior
Subordinated Debentures) to participate in the assets of the
subsidiary upon the subsidiary's liquidation.
The Subordinated Indenture does not limit the amount of Junior
Subordinated Debentures that we may issue under it. We may issue
Junior Subordinated Debentures from time to time under the
Subordinated Indenture in one or more series by entering into
supplemental indentures or by our Board of Directors or a duly
authorized committee authorizing the issuance. The Subordinated
Indenture also gives us the ability to reopen a previous issue of a
series of Junior Subordinated Debentures and issue additional
Junior Subordinated Debentures of such series.
A pricing or prospectus supplement will include the final terms for
each Junior Subordinated Debenture. If we decide to list upon
issuance any Junior Subordinated Debenture or Junior Subordinated
Debentures on a securities exchange, a pricing or prospectus
supplement will identify the exchange and state when we expect
trading could begin. The following terms of the Junior Subordinated
Debentures that we may sell at one or more times will be
established in a prospectus supplement:
- Maturity
- Fixed
or floating interest rate
- Remarketing
features
- Certificate
or book-entry form
- Redemption
- Not
convertible, amortized or subject to a sinking fund
- Interest
paid on fixed rate Junior Subordinated Debentures quarterly or
semi-annually
- Interest paid on floating rate Junior
Subordinated Debentures monthly, quarterly,
semi- annually, or
annually
- Issued
in multiples of a minimum denomination
- Ability
to defer payment of interest
- Any
other terms not inconsistent with the Subordinated
Indenture
- Issued with Original Issue
Discount
The Subordinated Indenture does not protect the holders of Junior
Subordinated Debentures if we engage in a highly leveraged
transaction.
Redemption
Provisions relating to the redemption of Junior Subordinated
Debentures will be set forth in the applicable prospectus
supplement. Unless we state otherwise in the applicable prospectus
supplement, we may redeem Junior Subordinated Debentures only upon
notice mailed at least 30 but not more than 60 days before the date
fixed for redemption. If we do not redeem all the Junior
Subordinated Debentures of a series at one time, DTC, in the case
of Junior Subordinated Debentures represented by a global security,
will select the particular Junior Subordinated Debentures or
portions thereof for redemption from the outstanding Junior
Subordinated Debentures not previously redeemed in accordance with
applicable procedures of DTC. If Junior Subordinated Debenture
certificates are outstanding, the Subordinated Indenture Trustee
selects the Junior Subordinated Debentures to be redeemed by lot or
in such other manner it determines to be fair.
Junior Subordinated Debenture Certificates-Registration, Transfer,
and Payment of Interest and Principal
Unless otherwise indicated in the applicable prospectus supplement,
each series of Junior Subordinated Debentures issued to the public
initially will be in the form of one or more global Junior
Subordinated Debentures, in registered form, without coupons, as
described under
Book-Entry System.
However, if we issue Junior Subordinated Debenture certificates,
they will be registered in the name of the Junior Subordinated
Debentureholder. The Junior Subordinated Debentures may be
transferred or exchanged, pursuant to administrative procedures in
the Subordinated Indenture, without the payment of any service
charge (other than any tax or other governmental charge) by
contacting the paying agent. Payments to public holders of Junior
Subordinated Debenture certificates will be made by check or by
wire transfer to an account located in the United States maintained
by the person entitled thereto as specified in the security
register.
Original Issue Discount
We may issue the Junior Subordinated Debentures at an original
issue discount, bearing no interest or bearing interest at a rate
that, at the time of issuance, is below market rate, to be sold at
a substantial discount below their stated principal amount.
Generally speaking, if the Junior Subordinated Debentures are
issued at an original issue discount and there is an event of
default or acceleration of their maturity, holders will receive an
amount less than their principal amount. Tax and other special
considerations applicable to original issue discount debt will be
described in the prospectus supplement in which we offer those
Junior Subordinated Debentures.
Interest Rate
The interest rate on the Junior Subordinated Debentures will either
be fixed or floating. The interest paid will include interest
accrued to, but excluding, the date of maturity or redemption.
Interest is generally payable to the person in whose name the
Junior Subordinated Debenture is registered at the close of
business on the record date before each interest payment date.
Interest payable at maturity or redemption, however, will be
payable to the person to whom principal is payable.
If we issue a Junior Subordinated Debenture after a record date but
on or prior to the related interest payment date, we will pay the
first interest payment on the interest payment date after the next
record date. We will pay interest payments by check or wire
transfer, at our option.
Fixed Rate Junior Subordinated Debentures
A pricing or prospectus supplement will designate the record dates,
payment dates, our ability to defer interest payments and the fixed
rate of interest payable on a Junior Subordinated Debenture. We
will pay interest quarterly or semi-annually, and upon maturity or
redemption. Unless an applicable pricing or prospectus supplement
states otherwise, if any payment date falls on a day that is not a
business day, we will pay interest on the next business day and no
additional interest will be paid. Interest payments will be the
amount of interest accrued to, but excluding, each payment date.
Interest will be computed using a 360-day year of twelve 30-day
months.
Floating Rate Junior Subordinated Debentures
Each floating rate Junior Subordinated Debenture will have an
interest rate formula. The applicable pricing or prospectus
supplement will state the initial interest rate or interest rate
formula on each Junior Subordinated Debenture effective until the
first interest reset date. The applicable pricing or prospectus
supplement will state the method and dates on which the interest
rate will be determined, reset and paid.
Events of Default
The following are events of default under the Subordinated
Indenture with respect to any series of Junior Subordinated
Debentures, unless we state otherwise in the applicable prospectus
supplement:
- failure
to pay for three business days the principal of (or premium, if
any, on) any Junior Subordinated Debenture of a series when due and
payable;
- failure
to pay for 30 days any interest on any Junior Subordinated
Debenture of any series when due and payable;
- failure
to perform any other requirements in such Junior Subordinated
Debentures, or in the Subordinated Indenture, for 90 days after
notice;
- certain
events of our bankruptcy or insolvency; or
- any
other event of default specified in a series of Junior Subordinated
Debentures.
An event of default for a particular series of Junior Subordinated
Debentures does not necessarily mean that an event of default has
occurred for any other series of Junior Subordinated Debentures
issued under the Subordinated Indenture. If an event of default
occurs and continues, the Subordinated Indenture Trustee or the
holders of at least 33% of the principal amount of the Junior
Subordinated Debentures of the series affected may require us to
repay the entire principal of the Junior Subordinated Debentures of
such series immediately ("Repayment Acceleration"). In most
instances, the holders of at least a majority
in aggregate principal amount of the Junior Subordinated Debentures
of the affected series may rescind a previously triggered Repayment
Acceleration. However, if we cause an event of default because we
have failed to pay (unaccelerated) principal, premium, if any, or
interest, Repayment Acceleration may be rescinded only if we have
first cured our default by depositing with the Subordinated
Indenture Trustee enough money to pay all (unaccelerated) past due
amounts and penalties, if any.
Subject to certain exceptions, the Subordinated Indenture Trustee
must within 90 days after a default occurs, notify the holders of
the Junior Subordinated Debentures of the series of default unless
such default has been cured or waived. We are required to file an
annual certificate with the Subordinated Indenture Trustee, signed
by an officer, concerning any default by us under any provisions of
the Subordinated Indenture.
Subject to the provisions of the Subordinated Indenture relating to
its duties in case of default, the Subordinated Indenture Trustee
shall be under no obligation to exercise any of its rights or
powers under the Subordinated Indenture at the request, order or
direction of any holders unless such holders offer the Subordinated
Indenture Trustee reasonable indemnity. Subject to the provisions
for indemnification, the holders of a majority in principal amount
of the Junior Subordinated Debentures of any series may direct the
time, method and place of conducting any proceedings for any remedy
available to, or exercising any trust or power conferred on, the
Subordinated Indenture Trustee with respect to such Junior
Subordinated Debentures.
Modification of Subordinated Indenture
Under the Subordinated Indenture, our rights and obligations and
the rights of the holders of any Junior Subordinated Debentures may
be changed. Any change affecting the rights of the holders of any
series of Junior Subordinated Debentures requires the consent of
the holders of not less than a majority in aggregate principal
amount of the outstanding Junior Subordinated Debentures of all
series affected by the change, voting as one class. However, we
cannot change the terms of payment of principal or interest, or
reduce the percentage required for changes or a waiver of default,
unless the holder consents. We may issue additional series of
Junior Subordinated Debentures and take other action that does not
affect the rights of holders of any series by executing
supplemental indentures without the consent of any
debentureholders.
Consolidation, Merger or Sale
We may merge or consolidate with any entity or sell substantially
all of our assets as an entirety as long as the successor or
purchaser (i) is organized and existing under the laws of the
United States, any state thereof or the District of Columbia and
(ii) expressly assumes the payment of principal, premium, if any,
and interest on the Junior Subordinated Debentures.
Legal Defeasance
We will be discharged from our obligations on the Junior
Subordinated Debentures of any series at any time if:
- we
deposit with the Subordinated Indenture Trustee sufficient cash or
government securities to pay the principal, interest, any premium
and any other sums due to the stated maturity date or a redemption
date of the Junior Subordinated Debenture of the series,
and
- we
deliver to the Subordinated Indenture Trustee an opinion of counsel
stating that the federal income tax obligations of debentureholders
of that series will not change as a result of our performing the
action described above.
If this happens, the debentureholders of the series will no longer
be entitled to the benefits of the Subordinated Indenture except
for registration of transfer and exchange of Junior Subordinated
Debentures and replacement of lost, stolen or mutilated Junior
Subordinated Debentures.
Covenant Defeasance
We will be discharged from our obligations under any restrictive
covenant applicable to the Junior Subordinated Debentures of a
particular series if we perform both actions described above.
See
Legal Defeasance.
If this happens, any later breach of that particular restrictive
covenant will not result in Repayment Acceleration. If we cause an
event of default apart from breaching that restrictive covenant,
there may not be sufficient money or government obligations on
deposit with the Subordinated Indenture Trustee to pay all amounts
due on the Junior Subordinated Debentures of that series. In that
instance, we would remain liable for such amounts.
Junior Subordinated Debentures issued to a trust will not be
subject to covenant defeasance.
Subordination
Each series of Junior Subordinated Debentures will be subordinate
and junior in right of payment, to the extent set forth in the
Subordinated Indenture, to all Senior Indebtedness as defined
below. If:
- we
make a payment or distribution of any of our assets to creditors
upon our dissolution, winding-up, liquidation or reorganization,
whether in bankruptcy, insolvency or otherwise;
- a
default beyond any grace period has occurred and is continuing with
respect to the payment of principal, interest or any other monetary
amounts due and payable on any Senior Indebtedness; or
- the
maturity of any Senior Indebtedness has been accelerated because of
a default on that Senior Indebtedness,
then the holders of Senior Indebtedness generally will have the
right to receive payment, in the case of the first instance, of all
amounts due or to become due upon that Senior Indebtedness, and, in
the case of the second and third instances, of all amounts due on
that Senior Indebtedness, or we will make provision for those
payments, before the holders of any Junior Subordinated Debentures
have the right to receive any payments of principal or interest on
their Junior Subordinated Debentures.
"Senior Indebtedness" means, with respect to any series of Junior
Subordinated Debentures, the principal, premium, interest and any
other payment in respect of any of the following:
- all
of our indebtedness that is evidenced by notes, debentures, bonds
or other securities we sell for money or other obligations for
money borrowed;
- all
indebtedness of others of the kinds described in the preceding
category which we have assumed or guaranteed or which we have in
effect guaranteed through an agreement to purchase, contingent or
otherwise; and
- all
renewals, extensions or refundings of indebtedness of the kinds
described in either of the preceding two categories.
Any such indebtedness, renewal, extension or refunding, however,
will not be Senior Indebtedness if the instrument creating or
evidencing it or the assumption or Guarantee of it provides that it
is not superior in right of payment to or is equal in right of
payment with those Junior Subordinated Debentures. Senior
Indebtedness will be entitled to the benefits of the subordination
provisions in the Subordinated Indenture irrespective of the
amendment, modification or waiver of any term of the Senior
Indebtedness.
The Subordinated Indenture does not limit the amount of Senior
Indebtedness that we may issue. As of September 30, 2020, our
Senior Indebtedness totaled approximately $5.29
billion.
Governing Law
The Subordinated Indenture and Junior Subordinated Debentures of
all series are governed by the laws of the State of New
York.
Concerning the Trustee
We and our affiliates use or will use some of the banking services
of the Subordinated Indenture Trustee in the normal course of
business. The Subordinated Trustee is also the Trustee under the
Indenture relating to the Senior Notes.
DESCRIPTION OF THE STOCK PURCHASE CONTRACTS AND THE
STOCK
PURCHASE UNITS
We may issue Stock Purchase Contracts representing contracts
obligating holders to purchase from us and we may sell to the
holders, a specified number of shares of common stock (or a range
of numbers of shares pursuant to a predetermined formula) at a
future date or dates. The price per share of common stock may be
fixed at the time the Stock Purchase Contracts are issued or may be
determined by reference to a specific formula set forth in the
Stock Purchase Contracts.
The Stock Purchase Contracts may be issued separately or as a part
of units, often known as Stock Purchase Units, consisting of a
Stock Purchase Contract and either Debt Securities or debt
obligations of third parties, including U.S. Treasury securities,
securing the holder's obligations to purchase the common stock
under the Stock Purchase Contracts.
The Stock Purchase Contracts may require us to make periodic
payments to the holders of the Stock Purchase Units or vice versa,
and such payments may be unsecured or prefunded on some basis. The
Stock Purchase Contracts may require holders to secure their
obligations in a specified manner and in certain circumstances we
may deliver newly issued prepaid Stock Purchase Contracts, often
known as prepaid securities, upon release to a holder of any
collateral securing such holder's obligations under the original
Stock Purchase Contract.
The applicable prospectus supplement will describe the terms of any
Stock Purchase Contracts or Stock Purchase Units and, if
applicable, prepaid securities. The description in the applicable
prospectus supplement will not necessarily contain all of
information that you may find useful. For more information, you
should review the Stock Purchase Contracts, the collateral
arrangements and depositary arrangements, if applicable, relating
to such Stock Purchase Contracts or Stock Purchase Units and, if
applicable, the prepaid securities and the document pursuant to
which the prepaid securities will be issued. These documents will
be filed with the SEC promptly after the offering of such Stock
Purchase Contracts or Stock Purchase Units and, if applicable,
prepaid securities.
BOOK-ENTRY SYSTEM
Unless otherwise stated in a prospectus supplement, book-entry only
securities of a series will be issued in the form of a global
security that the Trustee will deposit with the Depository Trust
Company (“DTC”), New York, New York. This means that we will not
issue security certificates to each holder. One or more global
securities will be issued to Cede & Co. (DTC’s partnership
nominee) or such other name as may be requested by an authorized
representative of DTC who will keep a computerized record of its
participants (for example, your broker) whose clients have
purchased the securities. The participant will then keep a record
of its clients who purchased the securities. Unless it is exchanged
in whole or in part for a certificate, a global security may not be
transferred, except that DTC, its nominees, and their successors
may transfer a global security as a whole to one
another.
Beneficial interests in global securities will be shown on, and
transfers of global securities will be made only through, records
maintained by DTC and its participants.
DTC, the world’s largest securities depository, is a
limited-purpose trust company organized under the New York Banking
Law, a “banking organization” within the meaning of the New York
Banking Law, a member of the Federal Reserve System, a “clearing
corporation” within the meaning of the New York Uniform Commercial
Code, and a “clearing agency” registered pursuant to the provisions
of Section 17A of the Securities Exchange Act of 1934, as amended.
DTC holds and provides asset servicing for over 3.5 million issues
of U.S. and non-U.S. equity issues, corporate and municipal debt
issues, and money market instruments (from over 100 countries) that
DTC’s participants (“Direct Participants”) deposit with DTC. DTC
also facilitates the post-trade settlement among Direct
Participants of sales and other securities transactions in
deposited securities, through electronic computerized book-entry
transfers and pledges between Direct Participants’ accounts. This
eliminates the need for physical movement of securities
certificates. Direct Participants include both U.S. and non-U.S.
securities brokers and dealers, banks, trust companies, clearing
corporations, and certain other organizations. DTC is a
wholly-owned subsidiary of The Depository Trust & Clearing
Corporation (“DTCC”). DTCC is the holding company for DTC, National
Securities Clearing Corporation and Fixed Income Clearing
Corporation, all of which are registered clearing agencies. DTCC is
owned by the users of its regulated subsidiaries. Access to the DTC
system is also available to others such as both U.S. and non-U.S.
securities brokers and dealers, banks, trust companies, and
clearing corporations that clear through or maintain a custodial
relationship with a Direct Participant, either directly or
indirectly (“Indirect Participants”). The DTC Rules applicable to
its Participants are on file with the SEC. More information about
DTC can be found at
www.dtcc.com
.
Purchases of securities under the DTC system must be made by or
through Direct Participants, which will receive a credit for the
securities on DTC’s records. The ownership interest of each actual
purchaser of each security (“Beneficial Owner”) is in turn to be
recorded on the Direct and Indirect Participants’ records.
Beneficial Owners will not receive written confirmation from DTC of
their purchase. Beneficial Owners are, however, expected to receive
written confirmations providing details of the transaction, as well
as periodic statements of their holdings, from the Direct or
Indirect Participant through which the Beneficial Owner entered
into the transaction. Transfers of ownership interests in the
securities are to be accomplished by entries made on the books of
Direct and Indirect Participants acting on behalf of Beneficial
Owners. Beneficial Owners will not receive certificates
representing their ownership interests in securities, except in the
event that use of the book-entry system for the securities is
discontinued.
To facilitate subsequent transfers, all securities deposited by
Direct Participants with DTC are registered in the name of DTC’s
partnership nominee, Cede & Co., or such other name as may be
requested by an authorized representative of DTC. The deposit of
securities with DTC and their registration in the name of Cede
& Co. or such other DTC nominee do not effect any change in
beneficial ownership. DTC has no knowledge of the actual Beneficial
Owners of the securities; DTC’s records reflect only the identity
of the Direct Participants to whose accounts such securities are
credited, which may or may not be the Beneficial Owners. The Direct
and Indirect Participants will remain responsible for keeping
account of their holdings on behalf of their
customers.
Conveyance of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants, and
by Direct Participants and Indirect Participants to Beneficial
Owners will be governed by arrangements among them, subject to any
statutory or regulatory requirements as may be in effect from time
to time. Beneficial Owners of securities may wish to take certain
steps to augment the transmission to them of notices of significant
events with respect to the securities, such as redemptions,
tenders, defaults, and proposed amendments to the securities
documents. For example, Beneficial Owners of securities may wish to
ascertain that the nominee holding the securities for their benefit
has agreed to obtain and transmit notices to Beneficial Owners. In
the alternative, Beneficial Owners may wish to provide their names
and addresses to the registrar and request that copies of notices
be provided directly to them.
Redemption notices shall be sent to DTC. If less than all of the
securities are being redeemed, DTC’s practice is to determine by
lot the amount of the interest of each Direct Participant in such
issue to be redeemed.
Neither DTC nor Cede & Co. (nor any other DTC nominee) will
consent or vote with respect to the securities unless authorized by
a Direct Participant in accordance with DTC’s MMI Procedures. Under
its usual procedures, DTC mails an Omnibus Proxy to us as soon as
possible after the record date. The Omnibus Proxy assigns Cede
& Co.’s consenting or voting rights to those Direct
Participants to whose accounts the securities are credited on the
record date (identified in a listing attached to the Omnibus
Proxy).
Payments on the securities will be made to Cede & Co., or such
other nominee as may be requested by an authorized representative
of DTC. DTC’s practice is to credit Direct Participants’ accounts
upon DTC’s receipt of funds and corresponding detail information
from us or the Trustee on the payable date in accordance with their
respective holdings shown on DTC’s records. Payments by
Participants to Beneficial Owners will be governed by standing
instructions and customary practices, as is the case with
securities held for the accounts of customers in bearer form or
registered in “street name”, and will be the responsibility of such
Participant and not of DTC, the Trustee or us, subject to any
statutory or regulatory requirements as may be in effect from time
to time. Payment of redemption proceeds and distributions to Cede
& Co. (or such other nominee as may be requested by an
authorized representative of DTC) is our responsibility,
disbursement of such payments to Direct Participants will be the
responsibility of DTC, and disbursement of such payments to the
Beneficial Owners will be the responsibility of Direct and Indirect
Participants.
A Beneficial Owner shall give notice to elect to have its
securities purchased or tendered, through its Participant, to the
Tender/Remarketing Agent, and shall effect delivery of such
securities by causing the Direct Participant to transfer the
Participant’s interest in the securities, on DTC’s records, to the
Tender/Remarketing Agent. The requirement for physical delivery of
the securities in connection with an optional tender or a mandatory
purchase will be deemed satisfied when the ownership rights in
the
securities are transferred by Direct Participants on DTC’s records
and followed by a book-entry credit of tendered securities to the
Tender/Remarketing Agent’s DTC account.
DTC may discontinue providing its services as depository with
respect to the securities at any time by giving reasonable notice
to us. Under such circumstances, in the event that a successor
depository is not obtained, security certificates are required to
be printed and delivered.
We may decide to discontinue use of the system of book-entry only
transfers through DTC (or a successor securities depository). In
that event, security certificates will be printed and delivered to
DTC.
The information in this section concerning DTC and DTC’s book-entry
system has been obtained from sources that we believe to be
reliable, but we take no responsibility for the accuracy
thereof.
PLAN OF DISTRIBUTION
We may sell the securities (a) through agents; (b) through
underwriters or dealers; or (c) directly to one or more
purchasers.
By Agents
Securities may be sold on a continuing basis through agents
designated by us. The agents will agree to use their reasonable
efforts to solicit purchases for the period of their
appointment.
Any initial offering price and any discounts, concessions or
commissions allowed or reallowed or paid to dealers may be changed
from time to time.
The agents will not be obligated to make a market in the
securities. We cannot predict the amount of trading or liquidity of
the securities.
By Underwriters
The applicable prospectus supplement will set forth the terms under
which the securities are offered, including the name or names of
any underwriters, the purchase price of the securities and the
proceeds to us from the sale, any underwriting discounts and other
items constituting underwriters' compensation, any initial offering
price and any discounts, commissions or concessions allowed or
reallowed or paid to dealers.
If underwriters are used in the sale, the underwriters will acquire
the securities for their own account. The underwriters may resell
the securities in one or more transactions, including negotiated
transactions, at a fixed public offering price or at varying prices
determined at the time of sale. The obligations of the underwriters
to purchase the securities will be subject to certain conditions.
The underwriters will be obligated to purchase all the securities
offered if any are purchased. Any initial public offering price and
any discounts or concessions allowed or re-allowed or paid to
dealers may be changed from time to time.
The underwriters may not be obligated to make a market in the
securities. We cannot predict the amount of trading or liquidity of
the securities.
Direct Sales
We may also sell securities directly. In this case, no underwriters
or agents would be involved.
General Information
Underwriters, dealers, and agents that participate in the
distribution of the securities may be underwriters as defined in
the Securities Act of 1933 (the "Act"), and any discounts or
commissions received by them from us and any profit on the resale
of the securities by them may be treated as underwriting discounts
and commissions under the Act.
We may have agreements with the underwriters, dealers and agents to
indemnify them against certain civil liabilities, including
liabilities under the Act or to contribute to payments that each
underwriter, dealer or agent may be required to make in respect
thereto.
Underwriters, dealers and agents may engage in transactions with,
or perform services for, us or our affiliates in the ordinary
course of their businesses.
LEGAL OPINIONS
Our counsel, Simpson Thacher & Bartlett LLP, New York, NY and
Houston, TX, or David C. House, Esq., Associate General Counsel of
American Electric Power Service Corporation, one of our affiliates,
or William E. Johnson, Esq., Senior Counsel of American Electric
Power Service Corporation, will issue an opinion about the legality
of the securities for us. Hunton Andrews Kurth LLP, New York, NY
will issue an opinion for the agents or underwriters. From time to
time, Hunton Andrews Kurth LLP acts as counsel to our affiliates
for some matters.
EXPERTS
The financial statements and management’s assessment of the
effectiveness of internal control over financial reporting (which
is included in Management’s Report on Internal Control over
Financial Reporting) incorporated in this Prospectus by reference
to the Annual Report on Form 10-K for the year ended December 31,
2019 have been so incorporated in reliance on the report of
PricewaterhouseCoopers LLP, an independent registered public
accounting firm, given on the authority of said firm as experts in
auditing and accounting.
$805,000,000
AMERICAN ELECTRIC POWER COMPANY, INC.
% Junior Subordinated Debentures due 2024
Remarketing Agents
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Barclays
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Wells Fargo Securities
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January , 2022
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