Allegheny Energy to end stock dividend under terms of credit agreement

By Sara Rosenberg

New York, Feb. 20 - Allegheny Energy Inc. has agreed to not pay dividends on its common stocks under the terms of the credit agreement that will be obtained by the company to repay existing debt, according to a filing with the Securities and Exchange Commission.

The company currently proposes to obtain approximately $2.1 billion of debt to refinance outstanding indebtedness. Approximately $1.9 billion of this debt is expected to be initially secured by assets of AE Supply and its subsidiaries.

The Hagerstown, Md. utility holding company currently has outstanding approximately $335 million borrowed under its bank facilities, $260 million of which came due on Dec. 31, 2002, and $300 million of its 7.75% notes due 2005, according to the filing. The bank facilities will be refinanced by Allegheny or repaid with proceeds of AE Supply's secured debt which will be paid as a dividend from AE Supply to Allegheny.

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