By Marisa Wong and Cristal Cody
Los Angeles, March 20 – Duke Energy Ohio, Inc. priced $750 million of 10- and 30-year first mortgage bonds (A2/A) in two tranches on Monday, according to an FWP filing with the Securities and Exchange Commission and details from a market source.
Duke Energy Ohio priced $375 million of 5.25% bonds due 2033 at 99.944 to yield 5.257%, or a spread of 175 basis points over Treasuries; and $375 million of 5.65% bonds due 2053 at 99.883 to yield 5.658%, or a spread of 200 bps over Treasuries.
Price talk for the 10-year notes was in the Treasuries plus 210 bps area and for the 30-year notes in the 235 bps area.
Book demand for the 10- and 30-year notes reached $4.5 billion and $5 billion, respectively.
The bonds feature a make-whole call option followed by a par call option.
BNP Paribas Securities Corp., Citigroup Global Markets Inc., PNC Capital Markets LLC, Santander US Capital Markets LLC, TD Securities (USA) LLC, Truist Securities, Inc. and U.S. Bancorp Investments, Inc. are the joint bookrunners for the offering.
Proceeds will be used to repay at maturity $300 million of 3.8% first mortgage bonds due Sept. 1, 2023, to repay a portion of the company’s outstanding $100 million term loan due October 2023, to pay down a portion of the outstanding intercompany short-term debt under the money-pool borrowing arrangement with Duke Energy Corp. and for general corporate purposes.
Cincinnati-based public utility Duke Energy Ohio is a subsidiary of Duke Energy Corp.
| Issuer: | Duke Energy Ohio, Inc.
|
| Amount: | $750 million
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| Issue: | First mortgage bonds
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| Bookrunners: | BNP Paribas Securities Corp., Citigroup Global Markets Inc., PNC Capital Markets LLC, Santander US Capital Markets LLC, TD Securities (USA) LLC, Truist Securities, Inc. and U.S. Bancorp Investments, Inc.
|
| Co-managers: | Loop Capital Markets LLC, Siebert Williams Shank & Co., LLC, Cabrera Capital Markets LLC, CAVU Securities, LLC, Penserra Securities LLC and R. Seelaus & Co., LLC
|
| Trustee: | Bank of New York Mellon Trust Co., NA
|
| Counsel to issuer: | In-house counsel and Hunton Andrews Kurth LLP
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| Counsel to underwriters: | Sidley Austin LLP
|
| Trade date: | March 20
|
| Settlement date: | March 22
|
| Ratings: | Moody’s: A2
|
| S&P: A
|
|
|
| 2033 bonds
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| Amount: | $375 million
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| Maturity: | April 1, 2033
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| Coupon: | 5.25%
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| Price: | 99.944
|
| Yield: | 5.257%
|
| Spread: | Treasuries plus 175 bps
|
| Call options: | Make-whole call at Treasuries plus 30 bps until Jan. 1, 2033; par call after that
|
| Price talk: | Treasuries plus 210 bps area
|
| Cusip: | 26442EAJ9
|
|
|
| 2053 bonds
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| Amount: | $375 million
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| Maturity: | April 1, 2053
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| Coupon: | 5.65%
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| Price: | 99.883
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| Yield: | 5.658%
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| Spread: | Treasuries plus 200 bps
|
| Call options: | Make-whole call at Treasuries plus 30 bps until Oct. 1, 2052; par call after that
|
| Price talk: | Treasuries plus 235 bps area
|
| Cusip: | 26442EAK6
|
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