Published on 8/15/2018 in the Prospect News Investment Grade Daily and Prospect News Preferred Stock Daily.
New Issue: CenterPoint sells upsized $800 million 6.125% fixed-to-floating perpetual preferreds
By James McCandless
San Antonio, Aug. 15 – CenterPoint Energy, Inc. priced an upsized $800 million of $1,000-par series A fixed-to-floating rate cumulative redeemable perpetual preferred stock (Baa1/BBB/BB+) on Wednesday with an initial dividend of 6.125%, according to an FWP filing with the Securities and Exchange Commission.
The offering was announced Tuesday and upsized from an expected $500 million.
There is no greenshoe.
Goldman Sachs & Co. LLC, Morgan Stanley & Co. LLC and J.P. Morgan Securities LLC are the joint bookrunners.
The preferreds have a fixed dividend until Sept. 1, 2023, then convert to a floating dividend of Libor plus 327 basis points.
The preferreds are redeemable after five years. Prior to that, they are redeemable within 120 days of a ratings event.
CenterPoint plans to use the proceeds to finance its merger with Vectren Corp. and to pay related fees and expenses.
The company does not plan to list the preferreds on any securities exchange.
CenterPoint is a Houston-based public utility holding company.
| Issuer: | CenterPoint Energy, Inc.
|
| Description: | Series A fixed-to-floating rate cumulative redeemable perpetual preferred stock
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| Amount: | $800 million, or 800,000 shares
|
| Maturity: | Perpetual
|
| Bookrunners: | Goldman Sachs & Co. LLC, Morgan Stanley & Co. LLC and J.P. Morgan Securities LLC
|
| Senior co-managers: | PNC Capital Markets LLC, Regions Securities LLC, TD Securities (USA) LLC, U.S. Bancorp Investments, Inc., Citigroup Global Markets Inc. and Wells Fargo Securities, LLC
|
| Co-managers: | BNY Mellon Capital Markets, LLC and Comerica Securities, Inc.
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| Dividend: | 6.125% until Sept. 1, 2023, then converts to a floating rate at Libor plus 327 bps
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| Price: | Par of $1,000
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| Call: | On or after Sept. 1, 2023 at par; prior to that, within 120 days of a ratings event
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| Pricing date: | Aug. 15
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| Settlement date: | Aug. 22
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| Ratings: | Moody’s: Baa3
|
| S&P: BBB
|
| Fitch: BB+
|
| Distribution: | SEC Registered
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