By Aleesia Forni
Virginia Beach, April 9 – Alabama Power Co. sold a combined $425 million of senior notes (A1/A/A+) in two tranches on Thursday, according to a market source and two FWP filings with the Securities and Exchange Commission.
A $250 million tranche of 2.8% series 2015B senior notes due 2025 sold at 99.888 to yield 2.813%, or Treasuries plus 85 basis points.
The notes sold at the tight end of guidance set in the 90 bps area over Treasuries. Initial talk was set in the range of 95 bps to 100 bps over Treasuries.
The sale also included a $175 million reopening of the company’s existing 3.75% series 2015A senior notes due March 1, 2045 priced at Treasuries plus 110 bps.
The add-on sold at the tight end of the 115 bps over Treasuries area guidance, which tightened from initial talk set in the Treasuries plus 120 bps area.
Pricing was at 101.051 to yield 3.691%.
The original $550 million of 3.75% senior notes due 2045 sold with a spread of 107 bps over Treasuries on March 5.
Proceeds will be used for redemption of the company’s 6.48 million shares of 5.2% class A preferred stock, 4 million shares of its 5.3% class A preferred stock and 6 million shares of its 5.625% preference stock. Any remaining proceeds will be used for general corporate purposes.
The bookrunners were Citigroup Global Markets Inc. J.P. Morgan Securities LLC, Scotia Capital (USA) Inc. and Wells Fargo Securities LLC.
The electric subsidiary of Southern Co. is based in Birmingham, Ala.
| Issuer: | Alabama Power Co.
|
| Issue: | Senior notes
|
| Amount: | $425 million
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| Bookrunners: | Citigroup Global Markets Inc. J.P. Morgan Securities LLC, Scotia Capital (USA) Inc., Wells Fargo Securities LLC
|
| Co-managers: | BB&T Capital Markets, Commerz Markets LLC, Regions Securities LLC, Mischler Financial Group, Inc., Samuel A. Ramirez & Co., Inc.
|
| Trade date: | April 9
|
| Settlement date: | April 14
|
| Ratings: | Moody’s: A1
|
| Standard & Poor’s: A
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| Fitch: A+
|
| Distribution: | SEC registered
|
|
|
| Notes due 2025
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| Amount: | $250 million
|
| Maturity: | April 1, 2025
|
| Coupon: | 2.8%
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| Price: | 99.888
|
| Yield: | 2.813%
|
| Spread: | 85 bps over Treasuries
|
| Price guidance: | 90 bps area over Treasuries, tightened from 95 bps to 100 bps
|
| Make-whole call: | 15 bps prior to Jan. 1, 2025, then callable at par
|
|
|
| Notes due 2045
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| Amount: | $175 million
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| Maturity: | March 1, 2045
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| Coupon: | 3.75%
|
| Price: | 101.051
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| Yield: | 3.691%
|
| Spread: | 110 bps over Treasuries
|
| Price guidance: | 115 bps area over Treasuries, tightened from 120 bps area
|
| Make-whole call: | 20 bps prior to Sept. 1, 2044, then callable at par
|
| Total issue size: | $725 million
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