By Sara Rosenberg
New York, May 2 - Duke Energy Corp. priced $700 million convertible senior notes due 2023 to yield 1.75% with an initial conversion premium of 40%.
The deal came with the yield at the rich end of revised talk and the conversion premium at the cheap end.
The offering was initially talked at 1.75% to 2.25% yield, with an initial conversion premium of 36% to 40% and then price talk was revised to 1.75% to 2.25% yield, with indications that the coupon will come at the low end of the range, with an initial conversion premium of 40% to 42%.
Citigroup Global Markets Inc., J.P. Morgan Securities Inc., Morgan Stanley & Co. Inc. and Wachovia Securities, Inc. are the bookrunners for the offering, which is being made under the company's existing shelf registration statement.
There is a $70 million greenshoe.
The convertibles are callable after four years and there are puts after four, nine and 14 years.
There is a contingent conversion threshold of 120% and a contingent payment trigger at 120%.
Expected ratings for the convertible offering are A3 from Moody's Investors Service and A- from Standard & Poor's.
The Charlotte, N.C. energy company will use proceeds for general corporate purposes, which may include the reduction of outstanding commercial paper.
Terms of the new deal are:
| Issuer: | Duke Energy Corp.
|
| Issue: | Convertible senior notes
|
| Amount: | $700 million
|
| Greenshoe: | $70 million
|
| Bookrunners: | Citigroup, J.P. Morgan, Morgan Stanley and Wachovia
|
| Maturity date: | May 11, 2023
|
| Coupon: | 1.75%
|
| Issue price: | Par
|
| Yield to maturity: | 1.75%
|
| Conversion premium: | 40%
|
| Conversion price: | $23.59
|
| Conversion ratio: | 42.391
|
| Call: | Non-callable for four years
|
| Put: | In years four, nine and 14
|
| Contingent conversion: | 120%
|
| Contingent payment: | 120% trigger
|
| Ratings: | Moody's: A3 (expected)
|
| S&P: A- (expected)
|
| Settlement date: | May 7, 2003
|
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