FRANKFORT, Ky. – Kentucky Power is teaming up with regional and local banks to promote area economic development and help finance the utility’s ongoing capital needs.
This bank partnership provides Kentucky Power, a subsidiary of American Electric Power (NYSE: AEP), access to $75 million via a senior unsecured four-year term loan, the utility announced Thursday. The funds will allow the company to update its infrastructure to continue to provide safe, reliable and affordable electricity to its customers.
“This financing strategy is a true win-win,” said Greg Pauley, president and chief operating officer for Kentucky Power. “It provides us with competitive financing terms to support our ongoing efforts to better serve our customers. And by doing business with Kentucky banks, we can help promote stronger local economies in the communities we serve. We especially thank Community Trust Bank Chairman Jean R. Hale, along with President and CEO Mark Gooch, for their leadership in cementing this partnership.”
Twelve banks with operations in Kentucky Power’s service territory are participating in the financing partnership. Community Trust Bank and Fifth Third Bank are serving as agent banks. Other partner banks include: Citizens National Bank of Paintsville; Peoples Bank & Trust Co.; First Commonwealth Bank; First & Peoples Bank and Trust Co.; Town Square Bank; Kentucky Farmers Bank; Commercial Bank (West Liberty); Hyden Citizens Bank; Inez Deposit Bank; and The Commercial Bank of Grayson. CFSD Group LLC served as an adviser to Kentucky Power.
“We are pleased to have the opportunity to work with Kentucky Power in financing this project,” said Hale with Community Trust Bank. “ As our region moves forward in changing our economy, strategic partnerships like this are integral to facilitating change.”
Collaborating with local banks on large-scale capital expenditures expands the financing strategies historically used by Kentucky Power. Until now, funding for such capital projects had been limited to larger financial institutions with global portfolios and the traditional capital markets.
“Raising capital in Kentucky makes perfect sense,” Pauley said. “This transaction allows us to build liquidity and diversify our lender base. In the process, we’ve established new alliances and restored relationships with banks operating within our region who also are our customers. We look forward to continuing to build upon these strong relationships with our banking partners.”
Kentucky Power, with headquarters in Frankfort, Ky., provides service to approximately 172,000 customers in all or part of 20 eastern Kentucky counties. It is a unit of American Electric Power, one of the largest electric utilities in the United States, which delivers electricity to more than 5 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 nearly 39,000-mile network that includes more 765 kilovolt extra-high voltage transmission lines than all other U.S. transmission systems combined. AEP's headquarters are in Columbus, Ohio. For more information, see kentuckypower.com, or the corporate website, AEP.com.