By Andrea Heisinger and Stephanie N. Rotondo
New York, Jan. 9 - Duke Energy Corp. priced $500 million of 5.125% $25-par junior subordinated debentures (Baa3/BBB-/BBB-) due Jan. 15, 2073, according to an FWP filing with the Securities and Exchange Commission.
Price talk was originally 5.25% to 5.375%, according to a trader. It was then revised to around 5.125% with the notes pricing in line with that level.
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.
Interest will be payable 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 Jan. 15, 2018 at par plus accrued interest and a make-whole premium of Treasuries plus 30 basis points. After that date, 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.
| Issuer: | Duke Energy Corp.
|
| Issue: | Junior subordinated notes
|
| Amount: | $500 million, increased from $200 million
|
| Maturity: | Jan. 15, 2073
|
| Bookrunners: | Bank of America Merrill Lynch, Citigroup Global Markets Inc., Morgan Stanley & Co. LLC, UBS Securities LLC, Wells Fargo Securities LLC
|
| Co-managers: | J.P. Morgan Securities LLC, RBC Capital Markets LLC
|
| Coupon: | 5.125%, payable quarterly
|
| Price: | Par of $25
|
| Yield: | 5.125%
|
| Call: | Make-whole at Treasuries plus 30 bps before Jan. 15, 2018, par call afterward
|
| Trade date: | Jan. 9
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| Settlement date: | Jan. 14
|
| Ratings: | Moody's: Baa3
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| Standard & Poor's: BBB-
|
| Fitch: BBB-
|
| Price talk: | 5.25% to 5.375% (initial), 5.125% area (revised)
|
| Expected listing: | NYSE: DUKH
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