Southern Power, Virginia Electric, Consolidated Edison price bonds; Duke Energy eases

By Cristal Cody

Eureka Springs, Ark., Nov. 10 – Investment-grade bond issuance resumed post-election on Thursday with nearly $3 billion of bonds priced by energy companies.

Southern Power Co. sold $1.3 billion of senior notes in three tranches.

Virginia Electric and Power Co. priced a $900 million two-part offering of senior notes.

Consolidated Edison Co. of New York, Inc. came with $750 million of debentures in two tranches.

Also, JPMorgan Chase & Co. was expected to price an offering of subordinated notes, according to a market source.

The Markit CDX North American Investment Grade index eased about 1 basis point to close the day at a spread of 75 bps.

Treasuries continued to sell off on Thursday with the 10-year note yield up 9 bps to 2.13%.

Duke Energy Corp.’s 2.65% senior notes due 2026 softened about 1 bp in secondary trading on Thursday after tightening 6 bps in the previous session.

Bank of America Corp.’s 3.248% senior notes due 2027 were quoted 10 bps tighter earlier in the day.

Southern Power prices

Southern Power sold $1.3 billion of senior notes (Baa1/BBB+/BBB+) in three tranches on Thursday, according to FWP filings with the Securities and Exchange Commission.

Southern Power priced $600 million of series 2016D 1.95% three-year notes at 99.975 to yield 1.958%, or 80 bps over Treasuries.

In the five-year tranche, Southern Power sold $300 million of series 2016E 2.5% notes at 99.781 to yield 2.546%, or Treasuries plus 100 bps.

The company placed $400 million of series 2016F 4.95% 30-year notes at 98.562 to yield 5.043%, or 210 bps over Treasuries.

Barclays, BNP Paribas Securities Corp., BofA Merrill Lynch, Mizuho Securities USA Inc., Scotia Capital (USA) Inc. and U.S. Bancorp Investments Inc. were the bookrunners.

Proceeds will be allocated to renewable energy generation projects and also used to redeem some of the company’s $200 million of series E 6.375% senior notes due Nov. 15, 2036 and to repay short-term debt.

Southern Power is an Atlanta-based electric company.

Virginia Electric prices

Virginia Electric and Power priced $900 million of senior notes (A2/BBB+/A) in two tranches on Thursday, according to an FWP filing with the SEC.

The company sold $400 million of 2.95% 10-year series B notes at 99.708 to yield 2.984%, or 85 bps over Treasuries.

Virginia Electric priced $500 million of 4% 30-year series C notes at 99.532 to yield 4.027%. The bonds priced with a spread of 110 bps over Treasuries.

BNP Paribas, MUFG, Scotia Capital, SunTrust Robinson Humphrey Inc. and U.S. Bancorp were the bookrunners.

Proceeds will be used for general corporate purposes and to repay short-term debt.

The electric utility is based in Richmond, Va.

ConEd sells debentures

Consolidated Edison Co. of New York priced $750 million of debentures (A2/A-/A-) in two parts during the session, according to FWP filings with the SEC.

The company sold $250 million of 2.9% 10-year series 2016B debentures at 99.593 to yield 2.947%, or 80 bps over Treasuries.

Consolidated Edison printed $500 million of 4.3% 40-year series 2016C debentures at 99.129 to yield 4.346%. The bonds priced with a spread of 140 bps over Treasuries.

Citigroup Global Markets Inc., J.P. Morgan Securities LLC, Mizuho Securities, MUFG, KeyBanc Capital Markets Inc. and U.S. Bancorp were the bookrunners.

Proceeds will be used for general corporate purposes, including repayment of short-term debt.

The electric utility is a subsidiary of New York City-based Consolidated Edison, Inc.

Duke Energy eases

Duke Energy’s 2.65% notes due 2026 softened about 1 bp to 112 bps bid in secondary trading on Thursday, a market source said.

The notes traded about 6 bps better on Wednesday.

The company sold $1.5 billion of the 10-year notes (Baa1/BBB+/BBB+) on Aug. 9 at a spread of 115 bps over Treasuries.

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

Bank of America tightens

Bank of America’s 3.248% notes due 2027 were quoted early Thursday 10 bps better at 132 bps offered in the secondary market, a source said.

The bank sold $2.5 billion of the notes (Baa1/BBB+/A) on Oct. 18 at a spread of 150 bps over Treasuries.

The financial services company is based in Charlotte, N.C.

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