By Devika Patel
Knoxville, Tenn., Sept. 9 – Southern Co. Gas Capital Corp. sold $900 million of notes (Baa1/A-/BBB+) in two tranches on Friday, according to an FWP filing with the Securities and Exchange Commission.
The company priced $350 million of 2.45% seven-year notes at a spread of 100 basis points over Treasuries.
The tranche priced at 99.922 to yield 2.42%.
It has a make-whole call at Treasuries plus 15 basis points until three months before maturity and is then callable at par.
Southern Co. Gas also sold $550 million of 3.95% 20-year notes at a spread of 165 bps over Treasuries.
These notes came at 99.823 to yield 3.96%.
They have a make-whole call at Treasuries plus 25 basis points until six months before maturity and are then callable at par.
J.P. Morgan Securities LLC, Mizuho Securities USA Inc., MUFG and SunTrust Robinson Humphrey Inc. are the bookrunners.
Proceeds will be used to repay funds the parent company lent to complete the acquisition of the 50% equity interest in Southern Natural Gas and related transaction costs, to repay $120 million of series A senior floating-rate notes due in October and for general corporate purposes.
Southern Co. Gas Capital is a financing arm of Atlanta-based energy services holding company Southern Co. Gas, formerly AGL Resources Inc., which is in turn a subsidiary of Southern Co.
| Issuer: | Southern Co. Gas Capital Corp.
|
| Guarantor: | Southern Co. Gas
|
| Amount: | $900 million
|
| Description: | Notes
|
| Bookrunners: | J.P. Morgan Securities LLC, Mizuho Securities USA Inc., MUFG and SunTrust Robinson Humphrey Inc.
|
| Co-managers: | BB&T Capital Markets, CIBC World Markets Corp., Fifth Third Securities Inc., TD Securities (USA) LLC, Drexel Hamilton, LLC, Loop Capital Markets LLC, Samuel A. Ramirez & Co. Inc. and Williams Capital Group LP
|
| Trade date: | Sept. 8
|
| Settlement date: | Sept. 13
|
| Ratings: | Moody’s: Baa1
|
| S&P: A-
|
| Fitch: BBB+
|
| Distribution: | Off shelf
|
|
|
| Seven-year notes
|
| Amount: | $350 million
|
| Maturity: | Oct. 1, 2023
|
| Coupon: | 2.45%
|
| Price: | 99.922
|
| Yield: | 2.462%
|
| Spread: | Treasury plus 100 bps
|
| Call: | Make-whole call until Aug. 1, 2023 at Treasuries plus 15 bps, thereafter at par
|
|
|
| Twenty-year notes
|
| Amount: | $550 million
|
| Maturity: | Oct. 1, 2046
|
| Coupon: | 3.95%
|
| Price: | 99.823
|
| Yield: | 3.96%
|
| Spread: | Treasuries plus 165 bps
|
| Call: | Make-whole call until April 1, 2046 at Treasuries plus 25 bps, thereafter at par
|
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