American Water Works Closes $800 Million Senior Notes Offering, Virginia American Water Receives New Rate Approval

American Water Works Company, Inc. (NYSE: AWK) reported significant developments on February 24, 2025, in its recent SEC Form 8-K filing. The company’s wholly owned finance subsidiary, American Water Capital Corp. (AWCC), finalized an underwriting agreement to sell $800 million aggregate principal amount of 5.250% Senior Notes due 2035. After deducting underwriting discounts, AWCC received net proceeds of approximately $791.7 million at the closing of the offering on February 27, 2025.

Under the terms of the offering, the net proceeds will be used for several purposes. They are intended to lend funds to American Water and its subsidiaries within the regulated water and wastewater businesses, repay at maturity $525.0 million of AWCC’s 3.400% Senior Notes due March 1, 2025, settle commercial paper obligations, and serve general corporate purposes. The Notes were issued pursuant to an Indenture supplemented by an officers’ certificate confirming the terms of the Notes and are supported by a longstanding support agreement from American Water.

In a related filing update, the Virginia State Corporation Commission (SCC) approved a settlement impacting Virginia American Water, a subsidiary of American Water. The SCC’s order, issued on February 24, 2025, approved a settlement establishing a $14.6 million annualized increase in water and wastewater revenues. Originally, the company’s filing on November 1, 2023, had requested an increase of $19.7 million based on more than $110 million in capital investments in treatment systems and distribution upgrades made between May 2023 and April 2025. As part of the settlement, the rate base is adjusted to $369 million from $275 million, and the approved return on equity (ROE) is maintained at 9.70%, with an approved capital structure reflecting 45.67% equity and 54.33% debt and other components. Customers affected by the interim rates, which became effective on May 1, 2024, will receive rate refunds and accrued interest within 90 days of the final order, with adjustments expected to lower average bills slightly.

These corporate moves underscore American Water Works’ strategy to manage its financing needs while continuing to invest in necessary infrastructure. The decisions are expected to bolster the company’s liquidity and support its service commitments in regulated water and wastewater markets.

This article was generated by an automated content engine and was reviewed by a human editor prior to publication. For additional information, read American Water Works’s 8K filing here.

American Water Works Company Profile

American Water Works Company, Inc, through its subsidiaries, provides water and wastewater services in the United States. It offers water and wastewater services to approximately 1,700 communities in 14 states serving approximately 3.5 million active customers. The company serves residential customers; commercial customers, including food and beverage providers, commercial property developers and proprietors, and energy suppliers; fire service and private fire customers; industrial customers, such as large-scale manufacturers, mining, and production operations; public authorities comprising government buildings and other public sector facilities, such as schools and universities; and other utilities and community water and wastewater systems.