| Issuer: | Southwestern Electric Power Company |
| Expected Ratings*: | Baa2 by Moody’s Investors Service, Inc. BBB+ by Standard & Poor’s Ratings Services |
| Designation: | Senior Notes, Series K, due 2026 |
| Principal Amount: | $400,000,000 |
| Maturity: | October 1, 2026 |
| Coupon: | 2.750% |
| Interest Payment Dates: | April 1 and October 1 |
| First Interest Payment Date: | April 1, 2017 |
| Treasury Benchmark: | 1.500% due August 15, 2026 |
| Treasury Yield: | 1.582% |
| Reoffer Spread: | T+118 basis points |
| Yield to Maturity: | 2.762% |
| Price to Public: | 99.896% of the principal amount thereof |
| Transaction Date: | September 26, 2016 |
| Settlement Date: | September 29, 2016 (T+3) |
| Redemption Terms: | |
| Make-whole call: | Prior to July 1, 2026 at a discount rate of the Treasury Rate plus 20 basis points |
| Par call: | On or after July 1, 2026 at par |
| Minimum Denomination: | $2,000 and integral multiples of $1,000 in excess thereof |
| CUSIP/ISIN: | 845437 BP6 / US845437BP68 |
| Joint Book-Running Managers: | Morgan Stanley & Co. LLC UBS Securities LLC Wells Fargo Securities, LLC BNY Mellon Capital Markets, LLC KeyBanc Capital Markets Inc. |
| Co-Managers: | BOK Financial Securities, Inc. PNC Capital Markets LLC |
