American Electric Power’s Appalachian Powerare out with price whispers on a $380 million utility tariff rate relief bond via lead arranger Morgan Stanley and financial advisor Public Resources Advisory Group (PRAG).

The West Virginia utility bond securitization, dubbed Appalachian Consumer Rate Relief Funding LLC, is structured with a $217.5 million, five-year bond and a $162.8 million, 12-year bond. Morgan Stanley, jointly with RBS Securities are the lead underwriters on the deal. Moody’s Investor Service has assigned both classes of notes a preliminary ‘Aaa’ rating.

Initial price talk on the class A-1 notes are in the 50 basis points area; the A-2’s are being talked at the 70 basis points area, according to a source familiar with the deal. 

In July, Ohio Power Company, a wholly-owned subsidiary of American Electric Power Company (AEP), priced a $267.4 million deal called Ohio Phase-In-Recovery Funding LLC. The transaction was led by Citigroup and RBC Capital Markets and rated by Moody’s.

The ‘Aaa’-rated, 2.25-year notes priced at a spread of 40 basis points over the interpolated swaps curve and the ‘Aaa’-rated, 5.08-year notes priced at 52 basis points over swaps.

In June, FirstEnergy priced a $445 million deal that was also rated by Moody’s and was underwritten by Goldman Sachs, Citigroup, Credit Agricole and Barclays.  The ‘Aaa’-rated, 1.6-year notes priced at 25 basis points over swaps; the ‘Aaa’-rated, 2.5-year notes priced at 40 basis points; and the ‘Aaa’-rated 13.69-year notes priced at 70 basis points.

The West Virginia Public Service Commission approved the final financing order on the securitization in September.  

 

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