American Water Announces Pricing for Notes Tender Offer

American Water Announces Pricing for Notes Tender Offer

VOORHEES, N.J.--(BUSINESS WIRE)-- American Water Works Company, Inc. (NYS: AWK) ("American Water"), the largest publicly traded U.S. water and wastewater utility company, today announced the consideration payable in respect to the previously announced cash tender offer (the "Tender Offer") by its wholly owned subsidiary, American Water Capital Corp. ("AWCC"), to purchase for cash up to $300,000,000 aggregate principal amount of outstanding 6.085% Senior Notes due 2017 (CUSIP No. 03040WAB1) (the "Notes"). The Tender Offer is being made on the terms and subject to the conditions set forth in the Offer to Purchase (the "Offer to Purchase"), dated Sept. 10, 2013, and the related Letter of Transmittal.

The tender offer is scheduled to expire at 11:59 p.m., New York City time, on Oct. 7, 2013, unless extended or earlier terminated (such date and time, as the same may be extended, the "Expiration Date").


As previously announced, holders who validly tendered (and did not validly withdraw) their Notes at or prior to 5:00 p.m., New York City time, on Sept. 23, 2013 (the "Early Participation Date"), will receive the Total Consideration as set forth in the table below, which includes an Early Participation Payment as set forth in the table below, for any Notes accepted for purchase. Holders who validly tender (and do not validly withdraw) Notes after the Early Tender Deadline but at or prior to the Expiration Date will be eligible to receive the Tender Offer Consideration, which is equal to the Total Consideration minus the Early Participation Payment and is set forth in the table below. The Total Consideration was calculated based on the Reference U.S. Treasury Security (as described in the Offer to Purchase) at 1:00 p.m. today, and is set forth in the table below.

      

Principal Amount

Reference U.S.

Bloomberg

Fixed

Total

Early Participation

Tender Offer

Outstanding

Treasury Security

Reference Page

Spread

Consideration(1)

Payment(1)

 

Consideration(1)

$750,000,000

1.5% U.S. Treasury Note due August 31, 2018

FIT1

17 bps$1,174.47$30$1,144.47
 
(1) For each $1,000 principal amount of Notes validly tendered.
 

In addition to the Total Consideration or Tender Offer Consideration, as applicable, holders of Notes accepted for payment will receive accrued and unpaid interest from the last interest payment date for the Notes to, but not including, the Payment Date. If the aggregate principal amount of Notes validly tendered exceeds $300,000,000, proration will occur. The Payment Date is expected to occur promptly after the Expiration Date and is expected to be Oct. 8, 2013.

The withdrawal rights for the Tender Offer expired at 5:00 p.m., New York City time, on Sept. 23, 2013 (the "Withdrawal Date"). Holders of Notes who validly tender their Notes after the Withdrawal Date but on or before the Expiration Date may not withdraw their Notes except in the limited circumstances described in the Offer to Purchase.

The tender offer is conditioned upon the satisfaction of certain conditions, as described in the Offer to Purchase. If any of the conditions are not satisfied, AWCC will not be obligated to accept for payment, purchase or pay for, and may delay the acceptance for payment of, any tendered Notes, in each event subject to applicable law, and may terminate the tender offer. Subject to applicable law, AWCC also may terminate the tender offer at any time before the Expiration Date in its sole discretion.

AWCC has engaged RBC Capital Markets, LLC to act as the dealer manager (the "Dealer Manager") in connection with the tender offer. Questions regarding the tender offer may be directed to RBC Capital Markets, LLC at (212) 618-7822 (collect) or (877) 381-2099 (toll-free). The information agent and tender agent is D.F. King and Co., Inc. Copies of the Offer to Purchase, Letter of Transmittal and related tender offer materials may be obtained by contacting D.F. King & Co., Inc. at (800) 290-6426 (toll-free) or (212) 269-5550 (collect).

This press release does not constitute an offer to sell or purchase, or the solicitation of an offer to sell or purchase, or the solicitation of tenders with respect to the Notes. No offer, solicitation, purchase or sale will be made in any jurisdiction in which such an offer, solicitation, or sale would be unlawful. The tender offer for the Notes is being made only pursuant to the tender offer documents, including the Offer to Purchase and the related Letter of Transmittal, which are being disseminated to holders of Notes. None of American Water, AWCC, the Dealer Manager, the Tender and Information Agent or their respective affiliates is making any recommendation as to whether or not holders should tender all or any portion of their Notes in the tender offer. Holders are urged to evaluate carefully all information in the Offer to Purchase and the related Letter of Transmittal, consult their own investment and tax advisors and make their own decisions whether to tender the Notes.

Founded in 1886, American Water is the largest publicly traded U.S. water and wastewater utility company. With headquarters in Voorhees, N.J., the company employs approximately 6,700 dedicated professionals who provide drinking water, wastewater and other related services to an estimated 14 million people in more than 30 states as well as parts of Canada. More information can be found at www.amwater.com.

Cautionary Statement Concerning Forward-Looking Statements

Certain statements in this press release are forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are predictions based on our current expectations and assumptions regarding future events and relate to, among other things, the timing of payment for Notes validly tendered and not withdrawn in the tender offer. Actual results could differ materially because of factors such as the failure of conditions to the tender offer to be satisfied, changes in the interest rate environment, and changes in the market for debt securities generally and the Notes in particular.

For further information regarding risks and uncertainties associated with American Water's business, please refer to American Water's annual, quarterly and current reports filed with the SEC. The Company undertakes no duty to update any forward-looking statement.



American Water Works Company, Inc.
Edward Vallejo, 856-566-4005
Vice President, Investor Relations
or
Maureen Duffy, 856-309-4546
Vice President, Communications

KEYWORDS:   United States  North America  New Jersey

INDUSTRY KEYWORDS:

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