DTE Energy sets price talk for $275 million 10-year notes at 10½%-10¾%

By Paul A. Harris

St. Louis, Nov. 7 - Energy and Industrial Utilities Co., LLC, a wholly owned subsidiary of Detroit-based DTE Energy Co., set price talk for its $275 million offering of 10-year senior notes (B2/B) at 10½% to 10¾% on Wednesday, according to an informed source.

The deal is expected to price before Friday's close.

Morgan Stanley and Barclays Capital are joint bookrunners for the Rule 144A and Regulation S offering.

The company is concurrently in the market with a $375 million term loan and a $50 million revolving credit facility.

Proceeds will be used to repay intercompany debt.

Proceeds will also be used to reimburse DTE Energy Services Inc. (DTEES), also a wholly owned subsidiary of DTE Energy, for certain pre-formation expenses and to pay a dividend to DTEES.

The notes and credit facility will be guaranteed by certain of Energy and Industrial Utilities Co.'s subsidiaries but will not be obligations of DTE Energy or any of its other affiliates.

DTE Energy is a diversified energy company involved in the development and management of energy-related businesses and services nationwide. Its operating units include Detroit Edison, an electric utility serving 2.2 million customers in southeastern Michigan, MichCon, a natural gas utility serving 1.3 million customers in Michigan and other non-utility, energy businesses focused on gas pipelines and storage, coal transportation, unconventional gas production and power and industrial projects.

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