Duke Energy plans offering of $25-par junior debentures due 2073; talk revised to 5.125%

By Stephanie N. Rotondo

Phoenix, Jan. 9 - Duke Energy Corp. intends to issue at least $200 million of $25-par junior subordinated debentures due Jan. 15, 2073, the company said in a prospectus filed with the Securities and Exchange Commission on Wednesday.

Price talk was originally 5.25% to 5.375%, according to a trader. It was then revised to around 5.125%.

Bank of America Merrill Lynch, Citigroup Global Markets Inc., Morgan Stanley & Co. LLC, UBS Securities LLC and Wells Fargo Securities LLC are the joint bookrunners. J.P. Morgan Securities LLC and RBC Capital Markets LLC are the co-managers.

Interest will be paid on the 15th day of January, April, July and October, beginning April 15. The company has the right to defer interest payments for up to 40 consecutive quarters, assuming there is no event of default.

The notes are callable before 2018 at par plus accrued interest and a make-whole premium. After 2018, the notes are callable at par plus accrued interest.

Additionally, the notes are redeemable before 2018 in whole, but not in part, within 90 days of a tax or rating agency event. The call price is par plus accrued interest.

Duke Energy intends to list the notes on the New York Stock Exchange under the ticker symbol "DUKH."

Proceeds will be used to help fund the redemption of $300 million of 7.1% junior subordinated deferrable interest notes due 2039, which were issued by a subsidiary, Florida Progress Funding Corp. Any remaining funds will be used to repay commercial paper as it matures, to fund capital expenditures of unregulated businesses and for general corporate purposes.

The diversified energy company is based in Charlotte, N.C.

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