Published on 8/9/2022 in the Prospect News Green Finance Daily and Prospect News Investment Grade Daily.
New Issue: Alabama Power prices $1 billion of senior notes in two parts, one green
By Wendy Van Sickle and Cristal Cody
Columbus, Ohio, Aug. 9 – Alabama Power Co. priced $1 billion of senior notes (A1/A-/A+) in two parts, including one tranche of green notes, on Tuesday, according to a 424B5 filing with the Securities and Exchange Commission.
The company priced $550 million of 3.75% series 2022B notes due Sept. 1, 2027 at 99.916 to yield 3.768%, or a spread of 80 basis points over Treasuries. Price talk was in the Treasuries plus 100 bps area, according to a market source.
The issuer also sold $450 million of 3.94% series 2022C green notes due Sept. 1, 2032 at 99.998 to yield 3.94%, or a spread of 115 bps over Treasuries. Spread talk was in the 130 bps to 135 bps area.
Barclays, Goldman Sachs & Co. LLC, Mizuho Securities USA LLC, PNC Capital Markets LLC, Scotia Capital (USA) Inc. and U.S. Bancorp Investments, Inc. are the joint bookrunners.
Proceeds from the series 2022B notes will be used for general corporate purposes, including the company’s continuous construction program.
Proceeds from the series 2022C notes will be used for eligible projects under the following categories: renewable energy, climate change adaptation, energy efficiency, clean transportation, green innovation, and diverse and small business suppliers.
The issuer is an electric utility based in Birmingham, Ala., and a wholly owned subsidiary of Southern Co.
| Issuer: | Alabama Power Co.
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| Amount: | $1 billion
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| Issue: | Senior notes and green senior notes
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| Bookrunners: | Barclays, Goldman Sachs & Co. LLC, Mizuho Securities USA LLC, PNC Capital Markets LLC, Scotia Capital (USA) Inc. and U.S. Bancorp Investments, Inc.
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| Co-managers: | Regions Securities LLC, Fifth Third Securities, Inc., KeyBanc Capital Markets Inc., FHN Financial Securities Corp., Hancock Whitney Investment Services, Inc., Drexel Hamilton, LLC, Loop Capital Markets LLC, Penserra Securities LLC, Samuel A. Ramirez & Co., Inc., AmeriVet Securities Inc. and Security Capital Brokerage, Inc.
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| Trustee: | Regions Bank
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| Counsel to issuer: | Balch & Bingham LLP and Troutman Pepper Hamilton Sanders LLP
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| Counsel to underwriters: | Hunton Andrews Kurth LLP
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| Trade date: | Aug. 9
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| Settlement date: | Aug. 12
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| Ratings: | Moody’s: A1
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| S&P: A-
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| Fitch: A+
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| Distribution: | SEC registered
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| Series 2022B notes
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| Amount: | $550 million
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| Maturity: | Sept. 1, 2027
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| Coupon: | 3.75%
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| Price: | 99.916
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| Yield: | 3.768%
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| Spread: | Treasuries plus 80 bps
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| Call: | Make-whole call at Treasuries plus 15 bps until Aug. 1, 2027, then a par call
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| Price talk: | Treasuries plus 100 bps area
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| Cusip: | 010392FY9
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| Series 2022C green notes
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| Amount: | $450 million
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| Maturity: | Sept. 1, 2032
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| Coupon: | 3.94%
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| Price: | 99.998
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| Yield: | 3.94%
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| Spread: | Treasuries plus 115 bps
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| Call: | Make-whole call at Treasuries plus 20 bps until March 1, 2032, then a par call
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| Price talk: | Treasuries plus 130 bps to 135 bps area
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| Cusip: | 010392FZ6
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