Published on 3/6/2023 in the Prospect News Investment Grade Daily.
New Issue: Duke Energy Progress sells $1 billion mortgage bonds due 2033, 2053
By Marisa Wong
Los Angeles, March 6 – Duke Energy Progress, LLC priced $1 billion of first mortgage bonds (Aa3/A) in two tranches on Monday, according to an FWP filing with the Securities and Exchange Commission.
Duke Energy priced $500 million of 5.25% 10-year bonds at 99.976 to yield 5.253%, or with a spread of 128 basis points over Treasuries, and $500 million of 5.35% 30-year bonds at 99.407 to yield 5.39%, or a spread of 148 bps over Treasuries.
Each series features a make-whole call followed by a par call.
Barclays, MUFG Securities Americas Inc., PNC Capital Markets LLC, RBC Capital Markets, LLC, U.S. Bancorp Investments, Inc., BNP Paribas Securities Corp., Goldman Sachs & Co. LLC and Wells Fargo Securities, LLC are the joint bookrunners.
Funds will be used to repay at maturity $300 million aggregate principal amount of Duke’s first mortgage bonds, 3.375% series due Sept. 1, 2023, to pay down a portion of outstanding short-term debt under the company’s money-pool borrowing arrangement with Duke Energy Corp. and for general company purposes.
Raleigh, N.C.-based Duke Energy Progress provides utility services. The company is an indirect wholly owned subsidiary of Duke Energy Corp.
| Issuer: | Duke Energy Progress, LLC
|
| Amount: | $1 billion
|
| Issue: | First mortgage bonds
|
| Joint bookrunners: | Barclays, MUFG Securities Americas Inc., PNC Capital Markets LLC, RBC Capital Markets, LLC, U.S. Bancorp Investments, Inc., BNP Paribas Securities Corp., Goldman Sachs & Co. LLC and Wells Fargo Securities, LLC
|
| Co-managers: | Siebert Williams Shank & Co., LLC, Academy Securities, Inc., Cabrera Capital Markets LLC and Mischler Financial Group, Inc.
|
| Trustee: | Bank of New York Mellon
|
| Counsel to issuer: | In-house counsel and Hunton Andrews Kurth LLP
|
| Counsel to underwriters: | Sidley Austin LLP
|
| Trade date: | March 6
|
| Settlement date: | March 9
|
| Ratings: | Moody’s: Aa3
|
| S&P: A
|
| Distribution: | SEC registered
|
|
|
| 2033 bonds
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| Amount: | $500 million
|
| Maturity: | March 15, 2033
|
| Coupon: | 5.25%
|
| Price: | 99.976
|
| Yield: | 5.253%
|
| Spread: | Treasuries plus 128 bps
|
| Call options: | Make-whole call at Treasuries plus 20 bps prior to Dec. 15, 2032; par call after that
|
| Cusip: | 26442UAQ7
|
|
|
| 2053 bonds
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| Amount: | $500 million
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| Maturity: | March 15, 2053
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| Coupon: | 5.35%
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| Price: | 99.407
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| Yield: | 5.39%
|
| Spread: | Treasuries plus 148 bps
|
| Call options: | Make-whole call at Treasuries plus 25 bps prior to Sept. 15, 2052; par call after that
|
| Cusip: | 26442UAR5
|
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