By Abigail W. Adams
Portland, Me., April 4 – Duke Energy Corp. priced $1.5 billion of three-year convertible notes (Baa2/BBB) after the market close on Monday at par with a coupon of 4.125% and an initial conversion premium of 25%, according to a company news release.
Pricing came at the midpoint of talk for a coupon of 3.875% to 4.375% and the cheap end of talk for an initial conversion premium of 25% to 30%, according to a market source.
Barclays, J.P. Morgan Securities LLC, BofA Securities Inc., Morgan Stanley & Co. LLC and Wells Fargo Securities LLC were bookrunners for the Rule 144A offering, which carries a greenshoe of $225 million.
The notes are non-callable. They are putable upon a fundamental change.
There is dividend protection via a conversion rate adjustment above $1.005 per quarter.
The notes will be settled in cash up to the principal amount with any remaining amount to be settled in cash, shares or a combination of both at the company’s option.
Net proceeds are expected to be $1.476 billion or $1.698 billion if the greenshoe is exercised in full.
Proceeds will be used to repay a portion of the company’s commercial paper and for general corporate purposes.
Duke Energy is a Charlotte, N.C.-based electric and natural gas utility company.
| Issuer: | Duke Energy Corp.
|
| Securities: | Convertible senior notes
|
| Amount: | $1.5 billion
|
| Greenshoe: | $225 million
|
| Maturity: | April 15, 2026
|
| Bookrunners: | Barclays, J.P. Morgan Securities LLC, BofA Securities Inc., Morgan Stanley & Co. LLC and Wells Fargo Securities LLC
|
| Coupon: | 4.125%
|
| Price: | Par
|
| Yield: | 4.125%
|
| Conversion premium: | 25%
|
| Conversion price: | $118.86
|
| Conversion rate: | 8.4131
|
| Call options: | Non-callable
|
| Put options: | Upon a fundamental change
|
| Pricing date: | April 3
|
| Settlement date: | April 6
|
| Ratings: | Moody’s: Baa2
|
| S&P: BBB
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| Distribution: | Rule 144A
|
| Talk: | Coupon of 3.875% to 4.375% and an initial conversion premium of 25% to 30%
|
| Stock symbol: | NYSE: DUK
|
| Stock price: | $95.09 at market close April 3
|
| Market capitalization: | $73.28 billion
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