ASHLAND, Ky. —Kentucky Power has renewed financing with regional and local banks to help fund the utility’s ongoing capital needs and promote area economic development.
The bank partnership first created in 2014 provides Kentucky Power access to $75 million via a senior unsecured four-year term loan. The financing allow Kentucky Power to update its infrastructure to continue to provide safe, reliable and affordable electricity to its customers in eastern Kentucky.
Thirteen banks with operations in Kentucky Power’s service territory are participating in the financing partnership led by Community Trust Bank and Fifth Third Bank. Other banks include Citizens Bank of Kentucky; First Commonwealth Bank; First & Peoples Bank and Trust Co.; Town Square Bank; Commercial Bank (West Liberty); The Commercial Bank of Grayson; Kentucky Farmers Bank; Hyden Citizens Bank; Inez Deposit Bank; Farmers & Traders Bank; and Farmers State Bank.
“This financing strategy is proven to be a true win-win for the banks involved and for Kentucky Power,” said Matt Satterwhite, president and chief operating officer for Kentucky Power. “The partnership provides Kentucky Power with competitive financing terms to support our ongoing efforts to better serve our customers. By doing business with Kentucky banks, we can help promote stronger local economies in the communities we serve.”
Collaborating with local banks on large-scale capital expenditures expands the financing strategies historically used by Kentucky Power. Before creating the local bank partnership, funding for such capital projects for Kentucky Power had been limited to larger financial institutions with global portfolios and the traditional capital markets.
“Raising capital in Kentucky makes perfect sense,” Satterwhite said. “This partnership 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 strong relationships with our banking partners.”
Kentucky Power, with headquarters in Ashland, provides electric service to about 168,000 customers in all or part of 20 eastern Kentucky counties, including Boyd, Breathitt, Carter, Clay, Elliott, Floyd, Greenup, Johnson, Knott, Lawrence, Leslie, Letcher, Lewis, Magoffin, Martin, Morgan, Owsley, Perry, Pike and Rowan. Kentucky Power is an operating company in the American Electric Power system, one of the largest electric utilities in the U.S., delivering electricity and custom energy solutions to nearly 5.4 million regulated customers in 11 states. AEP also owns the nation’s largest electricity transmission system. AEP’s headquarters are in Columbus, Ohio.