Published on 11/17/2014 in the Prospect News Investment Grade Daily.
New Issue: Duke Energy prices $700 million mortgage bonds due 2017, 2044
By Aleesia Forni
Virginia Beach, Nov. 17 – Duke Energy Progress Inc. priced a $700 million two-part offering of first mortgage bonds (Aa2/A/A+) on Monday, according to a market source and a FWP filed with the Securities and Exchange Commission.
The deal included a $200 million floating-rate tranche due 2017 priced at par to yield Libor plus 20 basis points.
The notes sold in line with price talk.
There was also $500 million of 4.15% notes due 2044 priced at 99.658 to yield 4.17%, or Treasuries plus 110 bps.
Pricing was at the tight end of talk.
BNP Paribas Securities Corp., Goldman Sachs & Co., J.P. Morgan Securities LLC, MUFG and Wells Fargo Securities LLC are the bookrunners.
Proceeds will be used to repurchase eight series of tax exempt bonds, to repay intercompany short-term debt under its money-pool borrowing arrangement with Duke Energy Corp. and for general corporate purposes.
Raleigh, N.C.-based Duke Energy Progress generates and distributes electricity in North Carolina and South Carolina.
| Issuer: | Duke Energy Progress Inc.
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| Issue: | First mortgage bonds
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| Amount: | $700 million
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| Bookrunners: | BNP Paribas Securities Corp., Goldman Sachs & Co., J.P. Morgan Securities LLC, MUFG, Wells Fargo Securities LLC
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| Co-managers: | BNY Mellon Capital Markets, LLC, Fifth Third Securities, Inc., KeyBanc Capital Markets Inc., Loop Capital Markets LLC, U.S. Bancorp Investments, Inc.
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| Junior co-managers: | Blaylock Beal Van LLC, CastleOak Securities, L.P
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| Trade date: | Nov. 17
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| Settlement date: | Nov. 20
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| Ratings: | Moody’s: Aa2
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| Standard & Poor’s: A
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| Fitch: A+
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| Distribution: | SEC-registered
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| Three-year bonds
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| Amount: | $200 million
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| Maturity: | Nov. 20, 2017
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| Coupon: | Libor plus 20 bps
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| Price: | Par
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| Yield: | Libor plus 20 bps
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| Price talk: | Libor plus 20 bps area, tightened from Libor plus 30 bps area
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| 30-year bonds
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| Amount: | $500 million
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| Maturity: | Dec. 1, 2044
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| Coupon: | 4.15%
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| Price: | 99.658
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| Yield: | 4.17%
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| Spread: | Treasuries plus 110 bps
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| Price talk: | Treasuries plus 115 bps area, tightened from Treasuries plus 120 bps to 125 bps
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| Make-whole call: | Treasuries plus 20 bps prior to June 1, 2044, then callable at par
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