Published on 4/13/2020 in the Prospect News Investment Grade Daily.
New Issue: Essential Utilities prices $1.1 billion of senior notes in two parts
By Cristal Cody
Tupelo, Miss., April 13 – Essential Utilities, Inc. sold $1.1 billion of senior notes (Baa2/A-) in two parts on Monday, according to a market source and an FWP filed with the Securities and Exchange Commission.
A $500 million tranche of 2.704% 10-year notes priced at par to yield a spread of Treasuries plus 195 basis points.
The company sold $600 million of 3.351% 30-year notes at par to yield a 195 bps over Treasuries spread.
Both tranches were talked to price in the Treasuries plus 237.5 bps area.
PNC Capital Markets LLC and RBC Capital Markets, LLC were the bookrunners.
Proceeds are expected to be used to repay debt under the company’s Peoples term loan facility, its March term loan facility and its revolving credit facility and for general corporate purposes.
The company, formerly known as Aqua America, Inc., is a Bryn Mawr, Pa.-based water utility.
| Issuer: | Essential Utilities, Inc.
|
| Amount: | $1.1 billion
|
| Description: | Senior notes
|
| Bookrunners: | PNC Capital Markets LLC and RBC Capital Markets, LLC
|
| Co-managers: | Citizens Capital Markets, Inc., Huntington Securities, Inc., BofA Securities, Inc., Wells Fargo Securities, LLC, Barclays, Morgan Stanley & Co. LLC, MUFG, TD Securities (USA) LLC, Robert W. Baird & Co. Inc., Janney Montgomery Scott LLC, Loop Capital Markets LLC, Evercore Group LLC and Boenning & Scattergood, Inc.
|
| Trade date: | April 13
|
| Settlement date: | April 15
|
| Ratings: | Moody’s: Baa2
|
| S&P: A-
|
| Distribution: | SEC registered
|
|
|
| 10-year notes
|
| Amount: | $500 million
|
| Maturity: | April 15, 2030
|
| Coupon: | 2.704%
|
| Price: | Par
|
| Yield: | 2.704%
|
| Spread: | Treasuries plus 195 bps
|
| Call features: | Make-whole call before Jan. 15, 2030 at price equal to greater of par and Treasuries plus 30 bps; thereafter at par
|
| Price guidance: | Treasuries plus 237.5 bps area
|
|
|
| 30-year notes
|
| Amount: | $600 million
|
| Maturity: | April 15, 2050
|
| Coupon: | 3.351%
|
| Price: | Par
|
| Yield: | 3.351%
|
| Spread: | Treasuries plus 195 bps
|
| Call features: | Make-whole call before Oct. 15, 2049 at price equal to greater of par and Treasuries plus 30 bps; thereafter at par
|
| Price guidance: | Treasuries plus 237.5 bps area
|
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