AEP dips after $2 bln stock sale priced

Shares of electric utility American Electric Power AEP..O down 1.7% before the bell at $102.39 after overnight follow-on priced

Columbus, Ohio-headquartered co late Mon announced ~19.6 mln shares at $102 for deal size of $2 bln

Offering price represents 2.1% discount to last sale

Co entered into forward sales agreements with Citigroup and Barclays, two of the lead bookrunners

Upon settlement of such agreements, expected to occur on or before Dec 31, 2026, co plans to use net proceeds for general purposes, including capital contributions to its utility subsidiaries, acquisitions and/or debt repayment

With ~534 mln shares outstanding immediately before this offering, per the SEC prospectus filing, co has ~$55.6 bln market cap

The forward sale format enables the utility to lock in current prices and delays issuing new shares and harvesting proceeds until AEP needs the funding, thereby avoiding immediate EPS dilution

Last week, peer Entergy ETR.N priced a $1.3 bln stock offering with a forward sale component

Through Mon close, AEP shares up 13% vs ~3% rise S&P 500 Utilities sector .SPLRCU and 2% decline in S&P 500 .SPX

In Feb, AEP said it was considering $10 bln boost to its 5-yr capex plan due to data center demand ramp up in its Midwest and southern service areas