By Wendy Van Sickle and Cristal Cody
Columbus, Ohio, Sept. 23 – Duke Energy Corp. priced $500 million of 3.25% fixed-to-fixed reset rate junior subordinated debentures due Jan. 15, 2082 (Baa3/BBB-) at par on Thursday, according to an FWP filing with the Securities and Exchange Commission.
The initial coupon of 3.25% is lower than talk in the 3.75% area.
The initial fixed rate will apply from the issue date to Jan. 15, 2027. The rate will reset to the five-year Treasury rate plus a spread of 232.1 basis points. Interest reset dates are on five-year anniversaries going forward.
Interest can be deferred at the option of the issuer.
The debentures are redeemable at par plus accrued interest during any period from and including the Oct. 15 immediately preceding an interest reset date through and including the reset date. They are redeemable at par plus interest following a tax event and at 102 plus interest following a rating-agency event.
Barclays, Credit Suisse Securities (USA) LLC, Morgan Stanley & Co. LLC and MUFG are joint bookrunners. Guggenheim Securities, LLC, RBC Capital Markets, LLC, Scotia Capital (USA) Inc. and SMBC Nikko Securities America, Inc. are also listed as bookrunners.
Bank of New York Mellon Trust Co. is the trustee.
The company is relying on in-house counsel and, for federal income tax considerations, Hunton Andrews Kurth LLP.
Sidley Austin LLP is advising the bookrunners.
Proceeds will be used to redeem the 5.125% junior subordinated debentures due 2073. The redemption was announced previously for Oct. 7. Pending the use of the proceeds for the redemption, the company will repay a portion of its commercial paper.
The energy holding company is based in Charlotte, N.C.
| Issuer: | Duke Energy Corp.
|
| Issue: | Fixed-to-fixed reset rate junior subordinated debentures
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| Amount: | $500 million
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| Maturity: | Jan. 15, 2082
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| Bookrunners: | Barclays, Credit Suisse Securities (USA) LLC, Morgan Stanley & Co. LLC, MUFG, Guggenheim Securities, LLC, RBC Capital Markets, LLC, Scotia Capital (USA) Inc. and SMBC Nikko Securities America, Inc.
|
| Co-managers: | KeyBanc Capital Markets Inc., CastleOak Securities, LP, Drexel Hamilton, LLC and R. Seelaus & Co., LLC
|
| Coupon: | 3.25% until Jan. 15, 2027, then will reset every five years at five-year Treasury rate plus 232.1 bps
|
| Price: | Par
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| Call: | At par plus accrued interest during any period from and including the Oct. 15 immediately preceding an interest reset date through and including the reset date; at par plus interest following a tax event and at 102 plus interest following a rating-agency event
|
| Trade date: | Sept. 23
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| Settlement date: | Sept. 28
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| Ratings: | Moody’s: Baa3
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| S&P: BBB-
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| Distribution: | SEC registered
|
| Talk: | Coupon in 3.75% area
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| Cusip: | 26441CBP9
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