By Marisa Wong
Los Angeles, Sept. 27 – Duke Energy Florida, LLC priced $200 million of floating-rate first mortgage bonds due Oct. 15, 2073 (A1/A) at par on Wednesday, according to an FWP filing with the Securities and Exchange Commission.
The bonds will bear interest at compounded SOFR minus 35 basis points, payable quarterly in arrears beginning Jan. 15, 2024.
The notes are callable at 105 starting on Oct. 15, 2053. The redemption price steps down in increments of 50 bps annually on Oct. 15, until a par call is reached starting on Oct. 15, 2063.
Holders may require the company to repurchase the bonds beginning on Oct. 15, 2024, every April 15 and Oct. 15 after that through Oct. 15, 2034 and subsequently on Oct. 15 of every second year through Oct. 15, 2070. The bonds are putable at 98 beginning Oct. 15, 2024 and on every redemption date through Oct. 15, 2028, at 99 beginning April 15, 2029 and on every redemption date through April 15, 2034 and at par on Oct. 15, 2034 and every redemption date after that.
Upon the occurrence of certain specific events, the bonds may be redeemed in full at the issuer’s option at 125 plus accrued interest. This may occur if all the company’s outstanding common stock is acquired by a governmental body or instrumentality or if substantially all of the company’s mortgage first-lien bondable property is released and the company holds sufficient money to redeem all the outstanding bonds at the applicable redemption prices plus accrued interest.
The maturity of the bonds may also be shortened upon the occurrence of a tax event.
Morgan Stanley & Co. LLC is leading the sale.
As previously reported, proceeds will be used to pay down a portion of intercompany short-term debt under money-pool borrowing arrangements with the issuer’s parent company and for general corporate purposes, including to fund capital expenditures for ongoing construction and capital maintenance. As of Aug. 31, the company had about $490 million of outstanding short-term money-pool borrowings at an annual interest rate of 5.52%.
Duke Energy Florida, based in St. Petersburg, Fla., is a regulated public utility and an indirect wholly owned subsidiary of Duke Energy Corp.
| Issuer: | Duke Energy Florida, LLC
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| Amount: | $200 million
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| Issue: | First mortgage bonds
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| Maturity: | Oct. 15, 2073
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| Bookrunner: | Morgan Stanley & Co. LLC
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| Trustee: | Bank of New York Mellon
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| Counsel to issuer: | In-house counsel and Hunton Andrews Kurth LLP
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| Counsel to underwriter: | Sidley Austin LLP
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| Coupon: | Compounded SOFR minus 35 bps, payable quarterly in arrears beginning Jan. 15, 2024
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| Price: | Par
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| Call options: | At 105 starting on Oct. 15, 2053; redemption price steps down in increments of 50 basis points annually on Oct. 15, until a par call is reached starting on Oct. 15, 2063; in full at 125 if all the company’s outstanding common stock is acquired by a governmental body or instrumentality or if substantially all of the company’s mortgage first-lien bondable property is released and the company holds sufficient money to redeem all the outstanding bonds
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| Put option: | Beginning on Oct. 15, 2024, every April 15 and Oct. 15 after that through Oct. 15, 2034 and subsequently on Oct. 15 of every second year through Oct. 15, 2070; at 98 beginning Oct. 15, 2024 and on every redemption date through Oct. 15, 2028, at 99 beginning April 15, 2029 and on every redemption date through April 15, 2034 and at par on Oct. 15, 2034 and every redemption date after that
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| Trade date: | Sept. 27
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| Settlement date: | Sept. 29
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| Ratings: | Moody’s: A1
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| S&P: A
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| Distribution: | SEC registered
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| Cusip: | 26444HAP6
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