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.