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Great Plains Energy $150 million mandatory talked at 7.75%-8.25%, up 16%-20%
By Ronda Fears
Nashville, June 4 - Great Plains Energy Inc. on Friday launched a $150 million issue of 2.6-year mandatory convertibles in the Feline Prides structure via Merrill Lynch & Co. for next week's business. The convertible is talked to yield 7.75% to 8.25% with a 16% to 20% initial conversion premium.
The deal, pricing concurrently with 4.4 million shares of common stock, is scheduled to price after the close Tuesday. Morgan Stanley & Co. Inc. is joint lead manager of the offering.
The issue will be non-callable.
There is dividend protection. The utility holding company pays an annual stock dividend of $1.66 per share, for a 5.55% yield.
A $22.5 million greenshoe is available.
With the stock offering, total proceeds before greenshoes are estimated at $275 million.
A portion of the proceeds will be filtered through to subsidiary Kansas City Power & Light Co. to retire $150 million of existing trust preferred securities. Great Plains Energy said it might provide Kansas City P&L another $75 million to reduce debt or use the remaining proceeds to reduce its short-term debt.
Great Plains Energy said the issuance of the stock and convertible will dilute 2004 earnings by about 3 cents per share.
But, including the dilutive affect of the offerings, the company also on Friday boosted its 2004 ongoing earnings guidance to $2.23 to $2.35 per share from the previous estimate of $2.20 to $2.32 per share. Strong year-to-date performance in wholesale electricity revenues, modestly favorable weather and solid retail growth at Kansas City P&L contributed to the increased guidance, the company said.
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