By Ronda Fears
Nashville, Tenn., Nov. 14 - Duke Energy Corp. early Wednesday sold $750 million of three-year mandatory convertible preferreds in the premium exchangeable participating securities, or PEPS, structure at par of 25 to yield 8.0% with an 18.5%% initial conversion premium, according to Morgan Stanley's website ConvertBond.com. Morgan Stanley was sole lead manager of the pop-up deal, which was not marketed with price talk.
Charlotte, N.C.-based Duke Energy, a diversified energy company, said it would use proceeds to fund a portion of the proposed $3.5 billion acquisition of Westcoast Energy. Pending closing of the acquisition, the company said it would use proceeds to repay commercial paper.
Vancouver, B.C.-based Westcoast Energy posted a net profit of C$127 million, or C$1.02 per share, for third quarter compared with C$24 million, or C20c a share, in third quarter 2000. Duke energy posted third quarter net income of $796 million, or $1.02 per share, up from $770 million, or 709c per share, in third quarter 2000 on a 7% gain in revenues. Duke Energy forecasts 2002 earnings-per-share growth of 10% to 15% from 2000 earnings of $2.10 a share. Duke Energy also has an 8.25% mandatory convertible preferred outstanding.
Terms of the new deal are:
Issuer: Duke Energy Corp.
Amount: $750 million
Greenshoe: $112.5 million
Lead Manager: Morgan Stanley
Maturity Date: Nov. 18, 2004
Dividend: 8.0%
Issue Price: par, $25
Yield-to-maturity: 8.0%
Conversion Premium: 18.5%
Conversion Price: $40.125/$47.5481
Conversion Ratio: 0.5258/0.6231
Call: non-callable
Expected Rating(s): Moody's: A3
| S&P: A
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| Settlement Date: | Nov. 19
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