Nashville, June 8 - Great Plains Energy Inc. sold $150 million of 2.6-year mandatory convertibles in the Feline Prides structure at par of 25 to yield 8.0% with an 18% initial conversion premium via sole bookrunner Merrill Lynch & Co.
The issue sold at the midpoint of guidance for a dividend of 7.75% to 8.25% and 16% to 20% initial conversion premium. It priced concurrently with 5 million shares of common stock at $30 each.
There is dividend protection. The utility holding company pays an annual stock dividend of $1.66 per share, for a 5.55% yield.
A portion of total 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 may provide Kansas City P&L another $75 million to reduce debt, or use the remaining proceeds to reduce its short-term debt.
Terms of the deal are:
| Issuer: | Great Plains Energy Inc.
|
| Issue: | Feline Prides
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| Bookrunners: | Merrill Lynch & Co.
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| Joint lead manager: | Morgan Stanley & Co.
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| Amount: | $150 million
|
| Greenshoe: | $22.5 million
|
| Maturity: | Dec. 31, 2007
|
| Dividend: | 8.0%
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| Price: | Par, $25
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| Yield: | 8.0%
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| Conversion premium: | 18%
|
| Conversion price: | $35.4326
|
| Conversion ratio: | 0.7056
|
| Call: | Non-callable
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| Ratings: | Moody's: Baa2
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| S&P: BBB-
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| Price talk: | 7.75-8.25%, up 16-20%
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| Pricing date: | June 8, after the close
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| Settlement date: | June 14
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| Distribution: | Registered
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