Published on 8/6/2018 in the Prospect News Investment Grade Daily.
New Issue: American Water prices $1.3 billion of senior notes in two tranches
By Cristal Cody
Tupelo, Miss., Aug. 6 – American Water Capital Corp. sold $1,325,000,000 of senior notes (A3/A) in two tranches on Monday, according to a market source and an FWP filing with the Securities and Exchange Commission.
The company priced $625 million of 3.75% 10-year notes at 99.981 to yield 3.752% and a spread of 82 basis points over Treasuries.
It also sold $700 million of 4.2% 30-year notes at 99.946 to yield 4.203%, or a spread of Treasuries plus 112 bps.
Both tranches priced on the tight side of guidance.
Mizuho Securities USA LLC, MUFG, RBC Capital Markets, LLC, TD Securities (USA) LLC, BofA Merrill Lynch and PNC Capital Markets LLC were the bookrunners.
The investor-owned water and wastewater utility is based in Voorhees, N.J.
| Issuer: | American Water Capital Corp.
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| Amount: | $1,325,000,000
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| Description: | Senior notes
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| Bookrunners: | Mizuho Securities USA LLC, MUFG, RBC Capital Markets, LLC, TD Securities (USA) LLC, BofA Merrill Lynch and PNC Capital Markets LLC
|
| Co-managers: | J.P. Morgan Securities LLC, U.S. Bancorp Investments Inc., Wells Fargo Securities LLC, BB&T Capital Markets, Regions Securities LLC, Blaylock Van, LLC, C.L. King & Associates, Inc., Loop Capital Markets LLC, MFR Securities, Inc., Mischler Financial Group, Inc., Multi-Bank Securities, Inc., Samuel A. Ramirez & Co., Inc., Siebert Cisneros Shank & Co., LLC, Telsey Advisory Group LLC and Williams Capital Group, LP
|
| Trade date: | Aug. 6
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| Settlement date: | Aug. 9
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| Ratings: | Moody’s: A3
|
| S&P: A
|
| Distribution: | SEC registered
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|
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| Ten-year notes
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| Amount: | $625 million
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| Maturity: | Sept. 1, 2028
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| Coupon: | 3.75%
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| Price: | 99.981
|
| Yield: | 3.752%
|
| Spread: | Treasuries plus 82 bps
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| Call features: | Make-whole call at Treasuries plus 15 bps; on or after June 1, 2028 at par
|
| Price guidance: | Treasuries plus 85 bps area, plus or minus 3 bps
|
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| Thirty-year notes
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| Amount: | $700 million
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| Maturity: | Sept. 1, 2048
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| Coupon: | 4.2%
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| Price: | 99.946
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| Yield: | 4.203%
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| Spread: | Treasuries plus 112 bps
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| Call features: | Make-whole call at Treasuries plus 20 bps; on or after March 1, 2048 at par
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| Price guidance: | Treasuries plus 115 bps area, plus or minus 3 bps
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