Morning Commentary: Duke Energy Ohio to sell notes; Ford Motor Credit, others on tap

By Devika Patel

Knoxville, Tenn., Jan. 3 – Primary activity in the investment-grade bond market picked up on Thursday with a handful of issuers announcing new offerings early in the trading session.

Among the potential issuers is Duke Energy Ohio, Inc., which plans to sell 10-year and 30-year first mortgage bonds in two tranches. The issuer is a unit of Charlotte, N.C.-based Duke Energy Corp.

In addition, Beaumont, Texas-based energy provider Entergy Texas Inc. announced an offering of first mortgage bonds in two tranches, and Dearborn, Mich.-based automaker Ford Motor Co.’s financing arm, Ford Motor Credit Co. LLC, said that it plans to sell senior notes in fixed- and floating-rate tranches.

Also, Berkshire Hathaway Finance Corp., the Omaha-based financing arm of Berkshire Hathaway Inc., reported it will offer senior notes.

Duke Energy Ohio offering

Duke Energy Ohio plans to sell first mortgage bonds in two tranches. The notes are due on Feb. 1, 2029 and Feb. 1, 2049.

The 2029 notes feature a make-whole call until Nov. 1, 2028 and then a par call. The 2049 notes feature a make-whole call until Aug. 1, 2048 and then a par call.

Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, Goldman Sachs & Co. LLC and U.S. Bancorp Investments Inc. are the bookrunners.

Proceeds will be used to repay at maturity $450 million of the company’s 5.45% first mortgage bonds due April 1, 2019, to pay down some commercial paper and for general corporate purposes.

Entergy Texas on tap

Entergy Texas said it will price an offering of first mortgage bonds in two tranches.

The bonds have a make-whole call and then a par call.

BNP Paribas Securities Corp., KeyBanc Capital Markets Inc., Mizuho Securities USA Inc., MUFG and Scotia Capital (USA) Inc. are the bookrunners.

Loop Capital Markets LLC and Siebert Cisneros Shank & Co., LLC are the co-managers.

Proceeds will be used to repay at maturity the company’s $500 million of 7.125% first mortgage bonds due Feb. 1, 2019 and for general corporate purposes.

Ford Credit to sell notes

Ford Motor Credit intends to sell senior notes in two fixed- and floating-rate tranches.

The floating-rate tranche will have a coupon that is based on Libor.

The floaters are non-callable. The fixed-rate notes are initially non-callable and will then have a par call.

Bookrunners are BNP Paribas, Deutsche Bank Securities Inc., Mizuho Securities, Morgan Stanley & Co. LLC, Goldman Sachs, NatWest Markets and RBC Capital Markets LLC.

Proceeds will be used to purchase receivables, for loans and for use in connection with the retirement of debt.

Berkshire brings offering

Berkshire Hathaway Finance intends to price senior notes, which will be guaranteed by parent company Berkshire Hathaway Inc.

The notes feature a make-whole call and then a par call.

BofA Merrill Lynch, Goldman Sachs, J.P. Morgan Securities LLC and Wells Fargo Securities LLC are the bookrunners.

Proceeds will be used to refinance the company's $950 million of floating-rate senior notes due Jan. 11, 2019, to repay intercompany debt and for general corporate purposes.

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