Great Plains plans $250 million convertible equity units to yield 12% to 12.5%, up 15% to 20%

By Rebecca Melvin

New York, May 11 - Great Plains Energy Inc. plans to price $250 million of convertible equity units after the close Tuesday, with talk putting the yield at 12% to 12.5% and the initial conversion premium at 15% to 20%, according to a syndicate source.

The offering consists of five million units with a par of $50 per unit. Concurrently, the utility holding company plans to price 10 million shares of common equity, or about $150 million, based on the last reported sale price on the New York Stock Exchange May 8.

There is also a greenshoe of up to an additional 750,000 equity units and up to 1.5 million shares.

Neither the common share offering nor the equity units offering will be contingent on the other.

Goldman, Sachs & Co. and J.P. Morgan Securities Inc. are acting as the joint bookrunners for both offerings, which are being made under a shelf registration statement.

The three-year equity units will initially consist of a forward purchase contract and a beneficial ownership interest in $1,000 principal amount of the company's subordinated notes due 2042.

Under the purchase contract, holders will be required to purchase a variable number of shares no later than June 15, 2012.

Proceeds from both offerings are expected to repay all or part of the borrowings under a revolving credit facility and to make contributions of capital to Kansas City Power & Light Co. and KCP&L Greater Missouri Operations Co. for general corporate purposes, including the repayment of all or a portion of KCP&L's outstanding commercial paper, the repayment of all or a portion of borrowings under GMO's revolving credit facilities and the funding of construction expenditures.

Kansas City, Mo.-based Great Plains is the holding company of regulated utilities Kansas City Power & Light and KCP&L Greater Missouri Operations.

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