Published on 3/8/2016 in the Prospect News Investment Grade Daily.
New Issue: Duke Energy Carolinas sells $1 billion seven-, 30-year mortgage bonds
By Aleesia Forni
New York, March 8 – Duke Energy Carolinas LLC priced $1 billion of first and refunding mortgage bonds (Aa2/A/AA-) in two parts on Tuesday, according to a market source and an FWP filed with the Securities and Exchange Commission.
The offering included $500 million of 2.5% bonds due 2023 sold at 99.961 to yield 2.506%, or Treasuries plus 87 basis points.
Also, $500 million of 3.875% bonds due 2046 priced at 99.647 to yield 3.895% with a spread of Treasuries plus 127 bps.
Both tranches sold at the tight side of guidance and tighter than initial price thoughts.
BNP Paribas Securities Corp., Citigroup Global Markets Inc., RBC Capital Markets LLC, TD Securities and UBS Securities LLC are the bookrunners.
Proceeds will be used to fund capital expenditures for ongoing construction, for capital maintenance and for general corporate purposes.
The Charlotte, N.C.-based company generates, transmits, distributes and sells electricity and is a wholly owned subsidiary of Duke Energy Corp.
| Issuer: | Duke Energy Carolinas LLC
|
| Issue: | First and refunding mortgage bonds
|
| Amount: | $1 billion
|
| Bookrunners: | BNP Paribas Securities Corp., Citigroup Global Markets Inc., RBC Capital Markets LLC, TD Securities, UBS Securities LLC
|
| Co-managers: | CIBC World Markets Corp., Credit Agricole Securities (USA) Inc., HSBC Securities (USA) Inc., Santander Investment Securities Inc.
|
| Junior co-managers: | Apto Partners, LLC, Blaylock Beal Van, LLC, Lebenthal & Co., LLC, Mischler Financial Group, Inc.
|
| Trade date: | March 8
|
| Settlement date: | March 11
|
| Ratings: | Moody’s: Aa2
|
| Standard & Poor’s: A
|
| Fitch: AA-
|
| Distribution: | SEC registered
|
|
|
| Seven-year notes
|
| Amount: | $500 million
|
| Maturity: | March 15, 2023
|
| Coupon: | 2.5%
|
| Price: | 99.961
|
| Yield: | 2.506%
|
| Spread: | Treasuries plus 87 bps
|
| Price guidance: | Treasuries plus 90 bps area (+/- 3 bps), tightened from Treasuries plus 105 bps to 110 bps
|
| Make-whole call: | Treasuries plus 15 bps prior to Jan. 15, 2023, then callable at par
|
|
|
| 30-year notes
|
| Amount: | $500 million
|
| Maturity: | March 15, 2046
|
| Coupon: | 3.875%
|
| Price: | 99.647
|
| Yield: | 3.895%
|
| Spread: | Treasuries plus 127 bps
|
| Price guidance: | Treasuries plus 130 bps area (+/- 3 bps), tightened from Treasuries plus 145 bps to 150 bps
|
| Make-whole call: | Treasuries plus 20 bps prior to Sept. 15, 2045, then callable at par
|
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