By Paul A. Harris
St. Louis, April 2 - Ipalco Enterprises, Inc., a wholly owned subsidiary of AES Corp., priced a $400 million issue of 7¼% eight-year non-callable senior secured notes (Ba1/BB/BBB-) at 98.526 to yield 7½% on Wednesday, according to informed source.
The yield was printed on the tight end of the 7½% to 7 5/8% price talk.
An informed source said that the deal was well-received by high-yield investors across the board and added that the order book was oversubscribed.
Merrill Lynch & Co. and Lehman Brothers were joint bookrunners for the notes, which were placed via Rule 144A for life. Banc of America Securities LLC, J.P. Morgan Securities Inc. and Scotia Capital were co-managers.
The sale generated $394.104 million of proceeds, which will be used to fund the tender for the company's 8 3/8% senior secured notes due 2008. At the time they were issued, the original coupon on those notes was 7 3/8%.
Ipalco is an Indianapolis-based holding company that, through its principal subsidiary Indianapolis Power & Light Co., a regulated electric utility, engages primarily in generating, transmitting, distributing and selling electric energy to retail customers in Indianapolis and neighboring areas.
| Issuer: | Ipalco Enterprises, Inc.
|
| Face amount: | $400 million
|
| Proceeds: | $394.104 million
|
| Maturity | : | April 1, 2016
|
| Security description: | Senior secured notes
|
| Bookrunners: | Merrill Lynch & Co., Lehman Brothers
|
| Co-managers: | Banc of America Securities LLC, J.P. Morgan Securities Inc., Scotia Capital
|
| Coupon: | 7¼%
|
| Price: | 98.526
|
| Yield: | 7½%
|
| Spread: | 412 bps
|
| Call protection: | Non-callable with a Treasuries plus 50 basis points make-whole provision
|
| Trade date: | April 2
|
| Settlement date: | April 15
|
| Ratings: | Moody's: Ba1
|
| Standard & Poor's: BB
|
| Fitch: BBB-
|
| Distribution: | Rule 144A for life
|
| Price talk: | 7½% to 7 5/8%
|
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