Published on 1/3/2024 in the Prospect News Investment Grade Daily.
New Issue: Duke Energy Carolinas sells $1 billion of 10-, 30-year mortgage bonds
By Wendy Van Sickle
Columbus, Ohio, Jan. 3 – Duke Energy Carolinas, LLC priced $1 billion of bonds in two parts (Aa3/A) on Wednesday, according to an FWP filed with the Securities and Exchange Commission.
The company priced $575 million of 4.85% first and refunding mortgage bonds due 2034 at 99.614 to yield 4.899%, or at a spread of 100 basis points over Treasuries.
The company also sold a $425 million add-on to its 5.4% first and refunding mortgage bonds due 2054 at 102.206 to yield 5.252%, or at 118 bps over the benchmark Treasury. Upon settlement, the new bonds due 2054 will be combined with the $500 million of bonds issued on June 15, 2023.
BMO Capital Markets Corp., BNY Mellon Capital Markets, LLC, BofA Securities, Inc., J.P. Morgan Securities LLC, PNC Capital Markets LLC and Truist Securities, Inc. are the bookrunners.
Proceeds will be used to pay down a portion of the issuer’s intercompany short-term debt under a money-pool borrowing arrangement with Duke Energy Corp. and for general corporate purposes. As of Nov. 30, there was approximately $476 million outstanding of 5.59% short-term money-pool borrowings.
The Charlotte, N.C.-based company generates, transmits, distributes and sells electricity and is a wholly owned subsidiary of Duke Energy Corp.
Issuer: | Duke Energy Carolinas, LLC
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Amount: | $1 billion
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Issue: | First and refunding mortgage bonds
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Bookrunners: | BMO Capital Markets Corp., BNY Mellon Capital Markets, LLC, BofA Securities, Inc., J.P. Morgan Securities LLC, PNC Capital Markets LLC and Truist Securities, Inc.
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Co-managers: | Loop Capital Markets LLC, Academy Securities, Inc., AmeriVet Securities, Inc., Great Pacific Securities and R. Seelaus & Co., LLC
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Trustee: | Bank of New York Mellon Trust Co., NA
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Counsel to issuer: | In-house counsel and Hunton Andrews Kurth LLP
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Counsel to underwriters: | Sidley Austin LLP
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Trade date: | Jan. 3
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Settlement date: | Jan. 5
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Ratings: | Moody’s: Aa3
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| S&P: A
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Distribution: | SEC registered
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2034 notes
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Amount: | $575 million
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Maturity: | Jan. 15, 2034
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Coupon: | 4.85%
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Price: | 99.614
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Yield: | 4.899%
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Spread: | Treasuries plus 100 bps
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Call features: | Make-whole call at any time prior to Oct. 15, 2033 at Treasuries plus 15 bps; thereafter at par
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Cusip: | 26441CBM5
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2054 add-on
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Amount: | $425 million add-on
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Maturity: | Jan. 15, 2054
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Coupon: | 5.4%
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Price: | 102.206
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Yield: | 5.252%
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Spread: | Treasuries plus 118 bps
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Call features: | Make-whole call at Treasuries plus 25 bps until July 15, 2053; thereafter at par
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Previous issue: | $500 million on June 15, 2023
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Cusip: | 26441CBL7
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