AMERICAN ELECTRIC POWER CO INCAEP
AMERICAN ELECTRIC POWER CO INC Debt Disclosure
FINANCING ACTIVITIES
The disclosures in this note apply to all Registrants, unless indicated otherwise.
Common Stock (Applies to AEP)
The following table is a reconciliation of common stock share activity:
| Shares of AEP Common Stock | Issued | Held in Treasury | |||||||||||||||
| Balance, December 31, 2022 | 525,099,321 | 11,233,240 | |||||||||||||||
| Issued | 2,269,836 | — | |||||||||||||||
| Treasury Stock Reissued | — | (10,048,668) | (a) | ||||||||||||||
| Balance, December 31, 2023 | 527,369,157 | 1,184,572 | |||||||||||||||
| Issued | 6,725,373 | — | |||||||||||||||
| Treasury Stock Reacquired | — | 2,243 | |||||||||||||||
| Balance, December 31, 2024 | 534,094,530 | 1,186,815 | |||||||||||||||
| Issued | 7,953,758 | — | |||||||||||||||
| Balance, December 31, 2025 | 542,048,288 | 1,186,815 | |||||||||||||||
(a)Reissued Treasury Stock used to fulfill share commitments related to AEP’s Equity Units.
ATM Program
In November 2025, AEP filed a prospectus supplement and executed an Equity Distribution Agreement, pursuant to which AEP may sell, from time to time, up to an aggregate of $3.5 billion of its common stock through an ATM offering program, including an equity forward sales component. The compensation paid to the selling agents by AEP may be up to 2% of the gross offering proceeds of the shares. For the year ended 2025, AEP issued 176,402 shares of common stock and received net cash proceeds of $21 million under the ATM program. As of December 31, 2025, approximately $3.5 billion of equity is available for issuance under the ATM program.
Forward Sale of Equity
In March 2025, AEP entered into separate forward sale agreements with non-affiliate forward purchasers relating to 22,549,020 shares of AEP’s common stock at an initial price of $102.00 per share, exclusive of an underwriting discount equal to $2.244 per share. Except in certain specified circumstances that would require physical share settlement, AEP may elect to settle the forward sale transaction by means of physical, cash or net share settlement. The timing of the settlement of the forward sale agreements is also at AEP’s discretion, and management currently expects settlement to occur on or prior to December 31, 2026. To the extent the forward sale agreements are physically settled, AEP will issue common stock to the forward purchasers and receive cash proceeds based on the applicable forward sale price on the settlement date as defined in the forward sale agreements. For the year ended 2025, AEP issued 5,022,229 shares of common stock and received net cash proceeds of $500 million. As of December 31, 2025, AEP expects approximately $1.7 billion of net cash proceeds from the remaining physical settlement of the forward sale agreements and management anticipates using any future proceeds for general corporate purposes, which may include capital contributions to utility subsidiaries, acquisitions or repayment of debt. The forward sale transactions will be classified as equity transactions because they are indexed to AEP’s common stock and physical settlement is within AEP’s control.
Long-term Debt
The following table details long-term debt outstanding:
| Weighted-Average | Interest Rate Ranges as of | Outstanding as of | ||||||||||||||||||||||||||||||||||||
| Interest Rate as of | December 31, | December 31, | ||||||||||||||||||||||||||||||||||||
| Company | Maturity | December 31, 2025 | 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||||||||||||
| AEP | (in millions) | |||||||||||||||||||||||||||||||||||||
| Senior Unsecured Notes | 2026-2055 | 4.45% | 1.63%-8.13% | 1.00%-8.13% | $ | 37,190 | $ | 36,411 | ||||||||||||||||||||||||||||||
| Pollution Control Bonds (a) | 2026-2038 (b) | 3.62% | 2.40%-4.70% | 0.63%-4.70% | 1,637 | 1,771 | ||||||||||||||||||||||||||||||||
| Notes Payable – Nonaffiliated (c) | 2026-2034 | 5.97% | 2.43%-6.89% | 0.93%-6.89% | 683 | 610 | ||||||||||||||||||||||||||||||||
| Securitization Bonds | 2028-2045 (d) | 4.71% | 2.29%-5.30% | 2.06%-4.88% | 984 | 578 | ||||||||||||||||||||||||||||||||
| Spent Nuclear Fuel Obligation (e) | 330 | 316 | ||||||||||||||||||||||||||||||||||||
| Junior Subordinated Notes | 2027-2054 | 5.83% | 3.88%-7.05% | 3.88%-7.05% | 4,681 | 2,579 | ||||||||||||||||||||||||||||||||
| Other Long-term Debt | 2026-2059 | 4.88% | 3.00%-13.72% | 3.00%-13.72% | 1,817 | 378 | ||||||||||||||||||||||||||||||||
| Total Long-term Debt Outstanding | $ | 47,322 | $ | 42,643 | ||||||||||||||||||||||||||||||||||
| AEP Texas | ||||||||||||||||||||||||||||||||||||||
| Senior Unsecured Notes | 2026-2055 | 4.62% | 2.10%-6.76% | 2.10%-6.76% | $ | 6,472 | $ | 5,874 | ||||||||||||||||||||||||||||||
| Pollution Control Bonds (a) | 2029-2030 (b) | 3.88% | 2.60%-4.55% | 2.60%-4.55% | 441 | 440 | ||||||||||||||||||||||||||||||||
| Securitization Bonds | 2029 (d) | 2.29% | 2.29% | 2.06%-2.29% | 102 | 127 | ||||||||||||||||||||||||||||||||
| Other Long-term Debt | 2059 | 4.50% | 4.50% | 4.50% | 1 | 1 | ||||||||||||||||||||||||||||||||
Total Long-term Debt Outstanding | $ | 7,016 | $ | 6,442 | ||||||||||||||||||||||||||||||||||
| AEPTCo | ||||||||||||||||||||||||||||||||||||||
| Senior Unsecured Notes | 2026-2053 | 4.21% | 2.75%-5.52% | 2.75%-5.52% | $ | 6,100 | $ | 5,768 | ||||||||||||||||||||||||||||||
| Other Long-term Debt | 2028 | 4.83% | 4.83% | —% | 499 | — | ||||||||||||||||||||||||||||||||
Total Long-term Debt Outstanding | $ | 6,599 | $ | 5,768 | ||||||||||||||||||||||||||||||||||
| APCo | ||||||||||||||||||||||||||||||||||||||
| Senior Unsecured Notes | 2027-2050 | 4.84% | 2.70%-7.00% | 2.70%-7.00% | $ | 4,688 | $ | 4,984 | ||||||||||||||||||||||||||||||
| Pollution Control Bonds (a) | 2028-2038 (b) | 3.92% | 3.30%-3.70% | 0.63%-4.22% | 379 | 430 | ||||||||||||||||||||||||||||||||
| Securitization Bonds | 2028 (d) | 3.77% | 3.77% | 3.77% | 92 | 120 | ||||||||||||||||||||||||||||||||
| Other Long-term Debt | 2026-2028 | 4.89% | 4.83%-13.72% | 5.75%-13.72% | 1,100 | 127 | ||||||||||||||||||||||||||||||||
Total Long-term Debt Outstanding | $ | 6,259 | $ | 5,661 | ||||||||||||||||||||||||||||||||||
| I&M | ||||||||||||||||||||||||||||||||||||||
| Senior Unsecured Notes | 2028-2053 | 4.52% | 3.25%-6.05% | 3.25%-6.05% | $ | 2,847 | $ | 2,845 | ||||||||||||||||||||||||||||||
| Pollution Control Bonds (a) | 2029 (b) | 3.70% | 3.70% | 0.75%-3.05% | 149 | 190 | ||||||||||||||||||||||||||||||||
| Notes Payable – Nonaffiliated (c) | 2026-2030 | 5.24% | 3.44%-6.41% | 0.93%-6.41% | 235 | 143 | ||||||||||||||||||||||||||||||||
| Spent Nuclear Fuel Obligation (e) | 330 | 316 | ||||||||||||||||||||||||||||||||||||
Total Long-term Debt Outstanding | $ | 3,561 | $ | 3,494 | ||||||||||||||||||||||||||||||||||
| OPCo | ||||||||||||||||||||||||||||||||||||||
| Senior Unsecured Notes | 2030-2051 | 4.16% | 1.63%-6.60% | 1.63%-6.60% | $ | 3,718 | $ | 3,716 | ||||||||||||||||||||||||||||||
Total Long-term Debt Outstanding | $ | 3,718 | $ | 3,716 | ||||||||||||||||||||||||||||||||||
| PSO | ||||||||||||||||||||||||||||||||||||||
| Senior Unsecured Notes | 2026-2051 | 4.59% | 2.20%-6.63% | 2.20%-6.63% | $ | 3,525 | $ | 2,854 | ||||||||||||||||||||||||||||||
| Other Long-term Debt | 2027 | 3.00% | 3.00% | 3.00% | 1 | 2 | ||||||||||||||||||||||||||||||||
Total Long-term Debt Outstanding | $ | 3,526 | $ | 2,856 | ||||||||||||||||||||||||||||||||||
| SWEPCo | ||||||||||||||||||||||||||||||||||||||
| Senior Unsecured Notes | 2026-2051 | 3.73% | 1.65%-6.20% | 1.65%-6.20% | $ | 3,653 | $ | 3,650 | ||||||||||||||||||||||||||||||
| Notes Payable – Affiliated | 2028 | 4.24% | 4.24% | —% | 1,000 | — | ||||||||||||||||||||||||||||||||
| Securitization Bonds | 2039 (d) | 4.88% | 4.88% | 4.88% | 321 | 331 | ||||||||||||||||||||||||||||||||
Total Long-term Debt Outstanding | $ | 4,974 | $ | 3,981 | ||||||||||||||||||||||||||||||||||
(a)For certain series of Pollution Control Bonds, interest rates are subject to periodic adjustment. Certain series may be purchased on demand at periodic interest adjustment dates. Letters of credit from banks and insurance policies support certain series. Consequently, these bonds have been classified for maturity purposes as Long-term Debt Due Within One Year - Nonaffiliated on the balance sheets.
(b)Certain Pollution Control Bonds are subject to redemption earlier than the maturity date.
(c)Notes payable represent outstanding promissory notes issued under term loan agreements and credit agreements with a number of banks and other financial institutions. At expiration, all notes then issued and outstanding are due and payable. Interest rates are both fixed and variable. Variable rates generally relate to specified short-term interest rates.
(d)Dates represent the scheduled final payment dates for the securitization bonds. The legal maturity date is one to two years later. These bonds have been classified for maturity and repayment purposes based on the scheduled final payment date.
(e)Spent Nuclear Fuel Obligation consists of a liability along with accrued interest for disposal of SNF. See “Spent Nuclear Fuel Disposal” section of Note 6 for additional information.
As of December 31, 2025, outstanding long-term debt was payable as follows:
| AEP | AEP Texas | AEPTCo | APCo | I&M | OPCo | PSO | SWEPCo | |||||||||||||||||||||||||||||||||||||||||||
| (in millions) | ||||||||||||||||||||||||||||||||||||||||||||||||||
| 2026 | $ | 3,194 | $ | 75 | $ | 425 | $ | 1,131 | $ | 117 | $ | — | $ | 51 | $ | 917 | ||||||||||||||||||||||||||||||||||
| 2027 | 2,453 | 26 | — | 356 | 68 | — | — | 17 | ||||||||||||||||||||||||||||||||||||||||||
| 2028 | 3,468 | 526 | 559 | 413 | 388 | — | — | 1,593 | ||||||||||||||||||||||||||||||||||||||||||
| 2029 | 2,887 | 627 | 55 | — | 162 | — | 100 | 19 | ||||||||||||||||||||||||||||||||||||||||||
| 2030 | 1,809 | 942 | 60 | — | 1 | 350 | — | 20 | ||||||||||||||||||||||||||||||||||||||||||
| After 2030 | 33,896 | 4,871 | 5,566 | 4,400 | 2,855 | 3,400 | 3,400 | 2,434 | ||||||||||||||||||||||||||||||||||||||||||
| Principal Amount | 47,707 | 7,067 | 6,665 | 6,300 | 3,591 | 3,750 | 3,551 | 5,000 | ||||||||||||||||||||||||||||||||||||||||||
Unamortized Discount, Net and Debt Issuance Costs | (385) | (51) | (66) | (41) | (30) | (32) | (25) | (26) | ||||||||||||||||||||||||||||||||||||||||||
Total Long-term Debt Outstanding | $ | 47,322 | $ | 7,016 | $ | 6,599 | $ | 6,259 | $ | 3,561 | $ | 3,718 | $ | 3,526 | $ | 4,974 | ||||||||||||||||||||||||||||||||||
Financing Activities Subsequent Events
In January 2026, AEPTCo issued $114 million of variable rate Other Long-term Debt due in 2028.
In January 2026, I&M retired $11 million of Notes Payable related to DCC Fuel.
In January 2026, Transource Energy issued $14 million of variable rate Other Long-term Debt due in 2028.
In February 2026, AEP made capital contributions of $81 million, $38 million and $128 million to APCo, OPCo and SWEPCo, respectively.
In February 2026, AEP Texas retired $12 million of Securitization Bonds.
In February 2026, APCo retired $14 million of Securitization Bonds.
Debt Covenants (Applies to AEP and AEPTCo)
Covenants in AEPTCo’s note purchase agreements and indenture limit the amount of contractually-defined priority debt (which includes a further sub-limit of $50 million of secured debt) to 10% of consolidated tangible net assets. AEPTCo’s contractually-defined priority debt was 0.9% of consolidated tangible net assets as of December 31, 2025. The method for calculating the consolidated tangible net assets is contractually-defined in the note purchase agreements.
Dividend Restrictions
Subsidiary Restrictions
Parent depends on its subsidiaries to pay dividends to shareholders. AEP’s subsidiaries pay dividends to Parent provided funds are legally available. Various financing arrangements and regulatory requirements may impose certain restrictions on the ability of the subsidiaries to transfer funds to Parent in the form of dividends.
All of the dividends declared by AEP’s utility subsidiaries that provide transmission or local distribution services are subject to a Federal Power Act requirement that prohibits the payment of dividends out of capital accounts in certain circumstances; payment of dividends is generally allowed out of retained earnings. The Federal Power Act also creates a reserve on earnings attributable to hydroelectric generation plants. Because of their ownership of such plants, this reserve applies to APCo and I&M.
Certain AEP subsidiaries have credit agreements that contain covenants that limit their debt-to-capitalization ratio to 67.5%. The method for calculating outstanding debt and capitalization is contractually-defined in the credit agreements.
The most restrictive dividend limitation for certain AEP subsidiaries is through the Federal Power Act restriction, while for other AEP subsidiaries the most restrictive dividend limitation is through the credit agreements. As of December 31, 2025, the maximum amount of restricted net assets of AEP’s subsidiaries that may not be distributed to the Parent in the form of a loan, advance or dividend was $20.5 billion.
The Federal Power Act restriction limits the ability of the AEP subsidiaries owning hydroelectric generation to pay dividends out of retained earnings. Additionally, the credit agreement covenant restrictions can limit the ability of the AEP subsidiaries to pay dividends out of retained earnings. As of December 31, 2025, the amount of any such restrictions were as follows:
| AEP | AEP Texas | AEPTCo | APCo | I&M | OPCo | PSO | SWEPCo | |||||||||||||||||||||||||||||||||||||||||||
| (in millions) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Restricted Retained Earnings | $ | 2,690 | (a) | $ | 904 | $ | — | $ | 901 | $ | 663 | $ | — | $ | 17 | $ | — | |||||||||||||||||||||||||||||||||
(a) Includes the restrictions of consolidated and non-consolidated subsidiaries.
Parent Restrictions (Applies to AEP)
The holders of AEP’s common stock are entitled to receive the dividends declared by the Board of Directors provided funds are legally available for such dividends. Parent’s income primarily derives from common stock equity in the earnings of its utility subsidiaries.
Pursuant to the leverage restrictions in credit agreements, AEP must maintain a percentage of debt-to-total capitalization at a level that does not exceed 67.5%. The method for calculating outstanding debt and capitalization is contractually-defined in the credit agreements. AEP may not declare or pay any cash dividend or distribution on its common stock during any period when AEP defers interest on its junior subordinated notes. As of December 31, 2025, AEP had $15.1 billion of available retained earnings to pay dividends to common shareholders. AEP paid $2.0 billion, $1.9 billion and $1.8 billion of dividends to common shareholders for the years ended December 31, 2025, 2024 and 2023, respectively.
Lines of Credit and Short-term Debt (Applies to AEP and SWEPCo)
AEP uses its commercial paper program to meet the short-term borrowing needs of its subsidiaries. The program funds a Utility Money Pool, which funds AEP’s utility subsidiaries; a Nonutility Money Pool, which funds certain AEP nonutility subsidiaries; and the short-term debt requirements of subsidiaries that are not participating in either money pool for regulatory or operational reasons, as direct borrowers. As of December 31, 2025, AEP had $6 billion in revolving credit facilities to support its commercial paper program.
Securitized Debt for Receivables, for the year ended 2025, had a weighted-average interest rate of 4.46% and a maximum amount outstanding of $900 million. The commercial paper program, for the year ended 2025, had a weighted-average yield of 4.47% and a maximum amount outstanding of $2.9 billion. AEP’s outstanding short-term debt was as follows:
| December 31, | ||||||||||||||||||||||||||||||||
| 2025 | 2024 | |||||||||||||||||||||||||||||||
| Company | Type of Debt | Outstanding Amount | Interest Rate (a) | Outstanding Amount | Interest Rate (a) | |||||||||||||||||||||||||||
| (in millions) | (in millions) | |||||||||||||||||||||||||||||||
| AEP | Securitized Debt for Receivables (b) | $ | 900 | 4.00 | % | $ | 900 | 4.73 | % | |||||||||||||||||||||||
| AEP | Commercial Paper | 605 | 3.92 | % | 1,618 | 4.70 | % | |||||||||||||||||||||||||
| SWEPCo | Notes Payable | 3 | 6.30 | % | 6 | 6.69 | % | |||||||||||||||||||||||||
| Total Short-term Debt | $ | 1,508 | $ | 2,524 | ||||||||||||||||||||||||||||
(a) Weighted-average rate of all borrowings outstanding as of December 31, 2025 and 2024, respectively.
(b) Amount of securitized debt for receivables as accounted for under the “Transfers and Servicing” accounting guidance.
Corporate Borrowing Program (Applies to Registrant Subsidiaries)
AEP subsidiaries use a corporate borrowing program to meet their short-term borrowing needs. The corporate borrowing program includes a Utility Money Pool, which funds AEP’s utility subsidiaries; a Nonutility Money Pool, which funds certain AEP nonutility subsidiaries; and direct borrowing from AEP. The AEP Utility Money Pool operates in accordance with the terms and conditions of its agreement filed with the FERC. The amounts of outstanding loans to (borrowings from) the Utility Money Pool as of December 31, 2025 and 2024 are included in Advances to Affiliates and Advances from Affiliates, respectively, on the Registrant Subsidiaries’ balance sheets. The Utility Money Pool participants’ money pool activity and corresponding authorized borrowing limits are described in the following tables:
Year Ended December 31, 2025:
| Maximum | Average | Net Loans to | |||||||||||||||||||||||||||||||||||||||
| Borrowings | Maximum | Borrowings | Average | (Borrowings from) | Authorized | ||||||||||||||||||||||||||||||||||||
| from the | Loans to the | from the | Loans to the | the Utility Money | Short-term | ||||||||||||||||||||||||||||||||||||
| Utility | Utility | Utility | Utility | Pool as of | Borrowing | ||||||||||||||||||||||||||||||||||||
| Company | Money Pool | Money Pool | Money Pool | Money Pool | December 31, 2025 | Limit | |||||||||||||||||||||||||||||||||||
| (in millions) | |||||||||||||||||||||||||||||||||||||||||
| AEP Texas | $ | 468 | $ | 486 | $ | 159 | $ | 94 | $ | (188) | $ | 750 | |||||||||||||||||||||||||||||
| AEPTCo | 404 | 312 | 176 | 50 | (140) | 1,070 | (a) | ||||||||||||||||||||||||||||||||||
| APCo | 264 | 464 | 126 | 25 | (192) | 750 | |||||||||||||||||||||||||||||||||||
| I&M | 145 | 290 | 71 | 132 | 192 | 750 | |||||||||||||||||||||||||||||||||||
| OPCo | 271 | 166 | 120 | 82 | (79) | 600 | |||||||||||||||||||||||||||||||||||
| PSO | 505 | 391 | 183 | 166 | (171) | 750 | |||||||||||||||||||||||||||||||||||
| SWEPCo | 472 | 1,117 | 254 | 110 | 23 | 750 | |||||||||||||||||||||||||||||||||||
Year Ended December 31, 2024:
| Maximum | Average | Net Loans to | |||||||||||||||||||||||||||||||||||||||
| Borrowings | Maximum | Borrowings | Average | (Borrowings from) | Authorized | ||||||||||||||||||||||||||||||||||||
| from the | Loans to the | from the | Loans to the | the Utility Money | Short-term | ||||||||||||||||||||||||||||||||||||
| Utility | Utility | Utility | Utility | Pool as of | Borrowing | ||||||||||||||||||||||||||||||||||||
| Company | Money Pool | Money Pool | Money Pool | Money Pool | December 31, 2024 | Limit | |||||||||||||||||||||||||||||||||||
| (in millions) | |||||||||||||||||||||||||||||||||||||||||
| AEP Texas | $ | 375 | $ | 274 | $ | 234 | $ | 165 | $ | (285) | $ | 600 | |||||||||||||||||||||||||||||
| AEPTCo | 313 | 332 | 72 | 138 | (73) | 820 | (a) | ||||||||||||||||||||||||||||||||||
| APCo | 400 | 132 | 103 | 30 | (77) | 750 | |||||||||||||||||||||||||||||||||||
| I&M | 136 | 8 | 59 | 4 | (127) | 500 | |||||||||||||||||||||||||||||||||||
| OPCo | 310 | 183 | 181 | 94 | 115 | 600 | |||||||||||||||||||||||||||||||||||
| PSO | 309 | 315 | 171 | 288 | 232 | 750 | |||||||||||||||||||||||||||||||||||
| SWEPCo | 362 | 59 | 250 | 57 | (275) | 750 | |||||||||||||||||||||||||||||||||||
(a) Amount represents the combined authorized short-term borrowing limit the State Transcos have from FERC or state regulatory commissions.
The activity in the above tables does not include short-term lending activity of certain AEP nonutility subsidiaries. AEP Texas’ wholly-owned subsidiary, AEP Texas North Generation Company, LLC and SWEPCo’s wholly-owned subsidiary, Mutual Energy SWEPCo, LLC participate in the Nonutility Money Pool. The amounts of outstanding loans to the Nonutility Money Pool as of December 31, 2025 and 2024 are included in Advances to Affiliates on each subsidiaries’ balance sheets. The Nonutility Money Pool participants’ money pool activity is described in the following tables:
Year Ended December 31, 2025:
| Maximum Loans | Average Loans | Loans to the Nonutility | ||||||||||||||||||
| to the Nonutility | to the Nonutility | Money Pool as of | ||||||||||||||||||
| Company | Money Pool | Money Pool | December 31, 2025 | |||||||||||||||||
| (in millions) | ||||||||||||||||||||
| AEP Texas | $ | 7 | $ | 7 | $ | 7 | ||||||||||||||
| SWEPCo | 2 | 2 | — | |||||||||||||||||
Year Ended December 31, 2024:
| Maximum Loans | Average Loans | Loans to the Nonutility | ||||||||||||||||||
| to the Nonutility | to the Nonutility | Money Pool as of | ||||||||||||||||||
| Company | Money Pool | Money Pool | December 31, 2024 | |||||||||||||||||
| (in millions) | ||||||||||||||||||||
| AEP Texas | $ | 7 | $ | 7 | $ | 7 | ||||||||||||||
| SWEPCo | 3 | 3 | 2 | |||||||||||||||||
AEP has a direct financing relationship with AEPTCo to meet its short-term borrowing needs. The amounts of outstanding loans to and borrowings from AEP as of December 31, 2025 and 2024 are included in Advances to Affiliates and Advances from Affiliates, respectively, on AEPTCo’s balance sheets. AEPTCo’s direct financing activities with AEP and corresponding authorized borrowing limits are described in the following tables:
Year Ended December 31, 2025:
| Borrowings | Authorized | |||||||||||||||||||||||||||||||||||||||||||
| Maximum | Maximum | Average | Average | from AEP | Loans to | Short-term | ||||||||||||||||||||||||||||||||||||||
| Borrowings | Loans | Borrowings | Loans | as of | AEP as of | Borrowing | ||||||||||||||||||||||||||||||||||||||
| Company | from AEP | to AEP | from AEP | to AEP | December 31, 2025 | December 31, 2025 | Limit (a) | |||||||||||||||||||||||||||||||||||||
| (in millions) | ||||||||||||||||||||||||||||||||||||||||||||
| AEPTCo Parent | $ | 107 | $ | 153 | $ | 18 | $ | 54 | $ | — | $ | 70 | $ | — | ||||||||||||||||||||||||||||||
| SWTCo | 2 | — | 2 | — | 2 | — | 50 | |||||||||||||||||||||||||||||||||||||
| Midwest Transmission Holdings | — | 36 | — | 4 | — | — | — | |||||||||||||||||||||||||||||||||||||
Year Ended December 31, 2024:
| Borrowings | Authorized | |||||||||||||||||||||||||||||||||||||||||||
| Maximum | Maximum | Average | Average | from AEP | Loans to | Short-term | ||||||||||||||||||||||||||||||||||||||
| Borrowings | Loans | Borrowings | Loans | as of | AEP as of | Borrowing | ||||||||||||||||||||||||||||||||||||||
| Company | from AEP | to AEP | from AEP | to AEP | December 31, 2024 | December 31, 2024 | Limit (a) | |||||||||||||||||||||||||||||||||||||
| (in millions) | ||||||||||||||||||||||||||||||||||||||||||||
| AEPTCo Parent | $ | 49 | $ | 149 | $ | 15 | $ | 57 | $ | — | $ | 20 | $ | — | ||||||||||||||||||||||||||||||
| SWTCo | 2 | — | 2 | — | 2 | — | 50 | |||||||||||||||||||||||||||||||||||||
(a) Amount represents the authorized short-term borrowing limit from FERC or state regulatory agencies not otherwise included in the utility money pool above.
The maximum and minimum interest rates for funds either borrowed from or loaned to the Utility Money Pool are summarized in the following table:
| Years Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Maximum Interest Rate | 4.83 | % | 5.79 | % | 5.81 | % | |||||||||||
| Minimum Interest Rate | 3.40 | % | 4.74 | % | 4.66 | % | |||||||||||
The average interest rates for funds borrowed from and loaned to the Utility Money Pool are summarized in the following table:
| Average Interest Rate for Funds Borrowed from the Utility Money Pool for the Years Ended December 31, | Average Interest Rate for Funds Loaned to the Utility Money Pool for the Years Ended December 31, | |||||||||||||||||||||||||||||||||||||
| Company | 2025 | 2024 | 2023 | 2025 | 2024 | 2023 | ||||||||||||||||||||||||||||||||
| AEP Texas | 4.60 | % | 5.48 | % | 5.46 | % | 4.19 | % | 5.45 | % | 5.71 | % | ||||||||||||||||||||||||||
| AEPTCo | 4.48 | % | 5.51 | % | 5.41 | % | 4.44 | % | 5.50 | % | 5.56 | % | ||||||||||||||||||||||||||
| APCo | 4.50 | % | 5.51 | % | 5.54 | % | 4.46 | % | 5.41 | % | 5.54 | % | ||||||||||||||||||||||||||
| I&M | 4.69 | % | 5.40 | % | 5.14 | % | 4.12 | % | 5.44 | % | 5.57 | % | ||||||||||||||||||||||||||
| OPCo | 4.43 | % | 5.70 | % | 5.43 | % | 4.70 | % | 5.20 | % | 5.60 | % | ||||||||||||||||||||||||||
| PSO | 4.51 | % | 5.50 | % | 5.51 | % | 4.68 | % | 4.79 | % | 5.35 | % | ||||||||||||||||||||||||||
| SWEPCo | 4.67 | % | 5.41 | % | 5.34 | % | 4.29 | % | 4.78 | % | 5.72 | % | ||||||||||||||||||||||||||
Maximum, minimum and average interest rates for funds loaned to the Nonutility Money Pool are summarized in the following table:
| Maximum Interest Rate | Minimum Interest Rate | Average Interest Rate | ||||||||||||||||||||||||
| Year Ended | for Funds Loaned to | for Funds Loaned to | for Funds Loaned to | |||||||||||||||||||||||
| December 31, | Company | the Nonutility Money Pool | the Nonutility Money Pool | the Nonutility Money Pool | ||||||||||||||||||||||
| 2025 | AEP Texas | 4.76 | % | 3.89 | % | 4.52 | % | |||||||||||||||||||
| 2025 | SWEPCo | 4.76 | % | 4.62 | % | 4.69 | % | |||||||||||||||||||
| 2024 | AEP Texas | 5.79 | % | 4.74 | % | 5.46 | % | |||||||||||||||||||
| 2024 | SWEPCo | 5.79 | % | 4.74 | % | 5.45 | % | |||||||||||||||||||
| 2023 | AEP Texas | 5.81 | % | 4.66 | % | 5.54 | % | |||||||||||||||||||
| 2023 | SWEPCo | 5.81 | % | 4.66 | % | 5.56 | % | |||||||||||||||||||
AEPTCo’s maximum, minimum and average interest rates for funds either borrowed from or loaned to AEP are summarized in the following table:
| Maximum | Minimum | Maximum | Minimum | Average | Average | |||||||||||||||||||||||||||||||||
| Interest Rate | Interest Rate | Interest Rate | Interest Rate | Interest Rate | Interest Rate | |||||||||||||||||||||||||||||||||
| for Funds | for Funds | for Funds | for Funds | for Funds | for Funds | |||||||||||||||||||||||||||||||||
| Year Ended | Borrowed from | Borrowed from | Loaned to | Loaned to | Borrowed from | Loaned to | ||||||||||||||||||||||||||||||||
| December 31, | AEP | AEP | AEP | AEP | AEP | AEP | ||||||||||||||||||||||||||||||||
| 2025 | 4.76 | % | 3.89 | % | 4.76 | % | 3.89 | % | 4.55 | % | 4.43 | % | ||||||||||||||||||||||||||
| 2024 | 5.79 | % | 4.66 | % | 5.79 | % | 4.66 | % | 5.53 | % | 5.56 | % | ||||||||||||||||||||||||||
| 2023 | 5.81 | % | 4.53 | % | 5.81 | % | 4.53 | % | 5.56 | % | 5.51 | % | ||||||||||||||||||||||||||
Interest expense related to short-term borrowing activities with the Utility Money Pool, Nonutility Money Pool and direct borrowing financing relationship are included in Interest Expense on each of the Registrant Subsidiaries’ statements of income. The Registrant Subsidiaries incurred interest expense for all short-term borrowing activities as follows:
| Years Ended December 31, | ||||||||||||||||||||
| Company | 2025 | 2024 | 2023 | |||||||||||||||||
| (in millions) | ||||||||||||||||||||
| AEP Texas | $ | 5 | $ | 7 | $ | 11 | ||||||||||||||
| AEPTCo | 8 | 4 | 8 | |||||||||||||||||
| APCo | 7 | 6 | 17 | |||||||||||||||||
| I&M | 2 | 4 | 3 | |||||||||||||||||
| OPCo | 4 | 4 | 10 | |||||||||||||||||
| PSO | 6 | 9 | 2 | |||||||||||||||||
| SWEPCo | 6 | 14 | 8 | |||||||||||||||||
Interest income related to short-term lending activities with the Utility Money Pool, Nonutility Money Pool and direct borrowing financing relationship are included in Interest Income, unless shown as Other Income due to materiality, on each of the Registrant Subsidiaries’ statements of income. The Registrant Subsidiaries earned interest income for all short-term lending activities as follows:
| Years Ended December 31, | ||||||||||||||||||||
| Company | 2025 | 2024 | 2023 | |||||||||||||||||
| (in millions) | ||||||||||||||||||||
| AEP Texas | $ | 1 | $ | 4 | $ | — | ||||||||||||||
| AEPTCo | 4 | 11 | 7 | |||||||||||||||||
| APCo | 1 | 2 | 1 | |||||||||||||||||
| I&M | 3 | — | 2 | |||||||||||||||||
| OPCo | 1 | 3 | — | |||||||||||||||||
| PSO | 2 | 1 | 2 | |||||||||||||||||
| SWEPCo | 3 | — | — | |||||||||||||||||
Credit Facilities
See “Letters of Credit” section of Note 6 for additional information.
Securitized Accounts Receivables – AEP Credit (Applies to AEP)
AEP Credit has a receivables securitization agreement with bank conduits. Under the securitization agreement, AEP Credit receives financing from the bank conduits for the interest in the receivables AEP Credit acquires from affiliated utility subsidiaries. These securitized transactions allow AEP Credit to repay its outstanding debt obligations, continue to purchase the operating companies’ receivables and accelerate AEP Credit’s cash collections.
AEP Credit’s receivables securitization agreement provides a commitment of $900 million from bank conduits to purchase receivables and expires in September 2027. As of December 31, 2025, the affiliated utility subsidiaries were in compliance with all requirements under the agreement.
Accounts receivable information for AEP Credit was as follows:
| Years Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| (dollars in millions) | |||||||||||||||||
| Effective Interest Rates on Securitization of Accounts Receivable | 4.46 | % | 5.39 | % | 5.33 | % | |||||||||||
| Net Uncollectible Accounts Receivable Written Off | $ | 34 | $ | 29 | $ | 31 | |||||||||||
| December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| (in millions) | |||||||||||
| Accounts Receivable Retained Interest and Pledged as Collateral Less Uncollectible Accounts | $ | 1,230 | $ | 1,117 | |||||||
Short-term – Securitized Debt of Receivables | 900 | 900 | |||||||||
| Delinquent Securitized Accounts Receivable | 66 | 56 | |||||||||
| Bad Debt Reserves Related to Securitization | 42 | 45 | |||||||||
| Unbilled Receivables Related to Securitization | 368 | 336 | |||||||||
AEP Credit’s delinquent customer accounts receivable represent accounts greater than 30 days past due.
Securitized Accounts Receivables – AEP Credit (Applies to Registrant Subsidiaries, except AEP Texas and AEPTCo)
Under this sale of receivables arrangement, the Registrant Subsidiaries sell, without recourse, certain of their customer accounts receivable and accrued unbilled revenue balances to AEP Credit and are charged a fee based on AEP Credit’s financing costs, administrative costs and uncollectible accounts experience for each Registrant Subsidiary’s receivables. APCo does not have regulatory authority to sell its West Virginia accounts receivable. The costs of customer accounts receivable sold are reported in Other Operation expense on the Registrant Subsidiaries’ statements of income. The Registrant Subsidiaries manage and service their customer accounts receivable, which are sold to AEP Credit. AEP Credit securitizes the eligible receivables for the operating companies and retains the remainder.
The amount of accounts receivable and accrued unbilled revenues under the sale of receivables agreement were:
| December 31, | ||||||||||||||
| Company | 2025 | 2024 | ||||||||||||
| (in millions) | ||||||||||||||
| APCo | $ | 203 | $ | 193 | ||||||||||
| I&M | 175 | 161 | ||||||||||||
| OPCo | 501 | 471 | ||||||||||||
| PSO | 140 | 111 | ||||||||||||
| SWEPCo | 169 | 154 | ||||||||||||
The fees paid to AEP Credit for customer accounts receivable sold were:
| Years Ended December 31, | ||||||||||||||||||||
| Company | 2025 | 2024 | 2023 | |||||||||||||||||
| (in millions) | ||||||||||||||||||||
| APCo | $ | 14 | $ | 16 | $ | 17 | ||||||||||||||
| I&M | 15 | 15 | 16 | |||||||||||||||||
| OPCo | 30 | 30 | 30 | |||||||||||||||||
| PSO | 13 | 14 | 15 | |||||||||||||||||
| SWEPCo | 15 | 18 | 19 | |||||||||||||||||
The proceeds on the sale of receivables to AEP Credit were:
| Years Ended December 31, | ||||||||||||||||||||
| Company | 2025 | 2024 | 2023 | |||||||||||||||||
| (in millions) | ||||||||||||||||||||
| APCo | $ | 1,992 | $ | 1,954 | $ | 1,820 | ||||||||||||||
| I&M | 2,415 | 2,105 | 2,055 | |||||||||||||||||
| OPCo | 3,332 | 3,198 | 3,339 | |||||||||||||||||
| PSO | 1,926 | 1,781 | 1,945 | |||||||||||||||||
| SWEPCo | 1,853 | 1,838 | 1,866 | |||||||||||||||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 12, 2026 | Showing above |
| 2023 | Feb 26, 2024 | |
| 2022 | Feb 23, 2023 | |
| 2021 | Feb 24, 2022 | |
| 2017 | Feb 23, 2018 | |
About Debt Disclosures
Debt disclosures detail a company's borrowing structure — the types of instruments, interest rates, maturity schedule, and covenant restrictions that define its financial obligations and flexibility. This section is essential for assessing refinancing risk, interest rate exposure, and the margin of safety against financial distress.
Key signals: the maturity schedule reveals concentration risk — large maturities within 1-2 years during tight credit markets can force dilutive refinancing or asset sales. Compare the fair value of debt against carrying amount to gauge whether the market views the company's credit risk differently than the balance sheet suggests. Watch covenant compliance disclosures for tightening cushions, especially leverage and interest coverage ratios. Variable-rate debt exposure quantifies sensitivity to interest rate changes. Secured versus unsecured mix affects recovery rates and future borrowing capacity. Compare net debt-to-EBITDA against industry peers and covenant limits to assess financial health.