FORT WAYNE, Ind., May 18, 2015 - Indiana Michigan Power (I&M), a subsidiary of American Electric Power (NYSE: AEP), announced that its financing partnership with community banks throughout Indiana and Michigan will continue for another three years.
The venture began in 2012 when I&M teamed up with regional and local banks to develop a senior unsecured term loan providing $110 million for infrastructure development. The renewed transaction, which closed last week, increased the size of the funding from local banks to $200 million, demonstrating both the banks’ and I&M’s commitment to economic development.
“I&M has been pleased with the outcome of this financing strategy and the economic benefit it has in the communities where we provide service. We look forward to our continued relationship with local banks as we invest in the infrastructure needed to provide our customers with reliable electricity,” said Paul Chodak, I&M’s President and Chief Operating Officer.
The proceeds from this transaction will be utilized for updating aging transmission and distribution infrastructure, continuing the Cook Nuclear Plant life cycle management program, making environmental retrofits at the Rockport Plant to comply with current U.S. Environmental Protection Agency regulations as well as building four emission-free solar generation facilities across the Indiana and Michigan service territory.
A total of 11 banks with more than 395 branches across Indiana and Michigan are participating in the financing agreement. PNC Financial Services and Fifth Third Bancorp served as the agent banks. Other participating banks include:
- Chemical Financial Corporation
- Centier Bank
- 1st Source Corporation
- First Merchants Corporation
- Lake City Bank
- Old National Bancorp
- MutualFirst Financial, Inc.
- Salin Bancshares, Inc.
- STAR Financial Group, Inc.
Including local banks to provide financing for capital investments on such a large scale expands on more traditional financing strategies employed by I&M. In recent years, the opportunity to finance large capital projects was commonly limited to larger financial institutions with global portfolios and the traditional capital markets.
“Old National Bank is pleased to partner with I&M on its capital investment program.ONB, I&M and other stakeholders share a consistent mission and principles and highly value community engagement and customer service. We look forward to this long-term collaboration and the significant community investment that ensues,” said Wendell Bontrager, Old National Bank Region President.
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Indiana Michigan Power (I&M) is headquartered in Fort Wayne, and serves more than 582,000 customers in Michigan and Indiana. It operates 3,595 MW of coal-fired generation in Indiana, 2,110 MW of nuclear generation in Michigan and 22 MW of hydro generation in both states. The company also provides its customers 450 MW of purchased wind generation.
I&M is a unit of American Electric Power (NYSE: AEP), which is one of the largest electric utilities in the United States, delivering electricity to more than 5.3 million customers in 11 states. AEP ranks among the nation’s largest generators of electricity, owning nearly 38,000 megawatts of generating capacity in the U.S. AEP also owns the nation’s largest electricity transmission system, a more than 40,000-mile network that includes more 765-kilovolt extra-high voltage transmission lines than all other U.S. transmission systems combined. AEP’s transmission system directly or indirectly serves about 10 percent of the electricity demand in the Eastern Interconnection, the interconnected transmission system that covers 38 eastern and central U.S. states and eastern Canada, and approximately 11 percent of the electricity demand in ERCOT, the transmission system that covers much of Texas.
AEP’s utility units operate as AEP Ohio, AEP Texas, Appalachian Power (in Virginia and West Virginia), AEP Appalachian Power (in Tennessee), Indiana Michigan Power, Kentucky Power, Public Service Company of Oklahoma, and Southwestern Electric Power Company (in Arkansas, Louisiana and east Texas). AEP’s headquarters are in Columbus, Ohio.
Additional information about I&M is available at IndianaMichiganPower.com
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