American Water announces $1 billion stock offering with forward component

American Water Works Company, Inc. (NYSE: AWK) announced a registered underwritten offering of $1 billion in shares of its common stock. The shares are expected to be borrowed by forward purchasers from third parties and sold to underwriters in connection with forward sale agreements.

Wells Fargo Securities, J.P. Morgan, and Mizuho are acting as joint book-running managers and representatives of the underwriters for the offering. American Water will issue and sell shares to underwriters to the extent that forward purchasers do not borrow and sell such shares.

The company expects to enter into forward sale agreements with Wells Fargo Bank, JPMorgan Chase Bank, and Mizuho Markets Americas LLC as forward counterparties. Under these agreements, American Water will agree to issue and sell $1 billion of shares at an initial forward price per share equal to the price at which underwriters purchase the shares, subject to certain adjustments upon physical settlement.

American Water intends to grant underwriters a 30-day option to purchase up to an additional $150 million in shares on the same terms. If exercised, the company expects to enter into additional forward sale agreements for the additional shares.

The company will not receive proceeds from the sale of common stock sold by forward purchasers to underwriters. Settlement of the forward sale agreements is expected to occur on or prior to December 31, 2026. American Water stated it will use net cash proceeds received upon settlement for general corporate purposes.

The offering is subject to market and other conditions, with no assurance as to whether or when it may be completed or the actual size or terms. The offering is being made pursuant to American Water's effective shelf registration statement filed with the Securities and Exchange Commission.

American Water is headquartered in Camden, New Jersey, and describes itself as the largest regulated water and wastewater utility company in the United States, serving more than 14 million people across 14 states and 18 military installations.

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