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American Water Capital Corp. Announces Proposed Private Placement of $900 Million of Exchangeable Senior Notes
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0 KommentareAmerican Water Capital Corp. (“AWCC”), a wholly owned finance subsidiary of American Water Works Company, Inc. (NYSE: AWK) (“American Water”), announced today that it intends to offer $900 million aggregate principal amount of its Exchangeable Senior Notes due 2026 (the “notes”) in a private placement (the “offering”) to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”). AWCC also intends to grant the initial purchasers of the notes an option to purchase, within a 13-day period beginning on, and including, the first date on which the notes are issued, up to an additional $135 million aggregate principal amount of the notes.
The notes will be senior unsecured obligations of AWCC and will have the benefit of a support agreement from American Water, referred to as the “support agreement,” which serves as a functional equivalent of a guarantee by American Water of the obligations of AWCC under the notes. The notes will accrue interest payable semi-annually in arrears and will mature on June 15, 2026, unless earlier exchanged or repurchased.
The notes will be exchangeable (1) for cash up to the aggregate principal amount of the notes to be exchanged and (2) for cash, shares of American Water’s common stock (“common stock”) or a combination of cash and shares of common stock, at AWCC’s election, in respect of the remainder, if any, of the exchange obligation in excess of the aggregate principal amount of the notes being exchanged. Prior to the close of business on the business day immediately preceding March 15, 2026, the notes will be exchangeable at the option of the noteholders only upon the satisfaction of specified conditions and during certain periods. On or after March 15, 2026, until the close of business on the business day immediately preceding the maturity date, the notes will be exchangeable at the option of the noteholders at any time regardless of these conditions or periods.
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AWCC may not redeem the notes prior to the maturity date, and no sinking fund is provided for the notes. Subject to certain conditions, holders of the notes will have the right to require AWCC to repurchase all or a portion of their notes upon the occurrence of a fundamental change (as defined in the indenture that will govern the notes) at a repurchase price of 100% of their principal amount plus any accrued and unpaid interest. In connection with certain corporate events, AWCC will, under certain circumstances, increase the exchange rate for noteholders who elect to exchange their notes in connection with any such corporate event.
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