By Aleesia Forni
Virginia Beach, May 11 – Appalachian Power Co. was in the market on Monday with a $650 million offering of senior notes (Baa1/BBB/) in two tranches, according to a market source and a FWP filed with the Securities and Exchange Commission.
The sale includes $300 million of 3.4% series V notes due 2025 priced at Treasuries plus 120 basis points, or 99.645 to yield 3.442%.
The notes sold at the tight end of guidance set in the 125 bps area over Treasuries having tightened from talk set in the 125 bps to 130 bps range over Treasuries.
A second tranche was $350 million of 4.45% series W notes due 2045, which sold at 99.277 to yield 4.494%, or Treasuries plus 150 bps.
Guidance was set in the area of 155 bps over Treasuries. The notes were initially talked in the range of 155 bps to 160 bps over Treasuries.
Goldman Sachs & Co., U.S. Bancorp Investments Inc., Wells Fargo Securities LLC, BNY Mellon Capital Markets LLC, KeyBanc Capital Markets and MUFG are the joint bookrunners.
Proceeds from the sale will be used for general corporate purposes relating to the company's utility business, including the repayment of the company's $300 million 3.40% senior notes, series S, due May 24, 2015 and the redemption of its $350 million 7.95% senior notes, series R, due Jan. 15, 2020
The utility is based in Columbus, Ohio.
| Issuer: | Appalachian Power Co.
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| Issue: | Senior notes
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| Amount: | $650 million
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| Bookrunners: | Goldman Sachs & Co., U.S. Bancorp Investments Inc., Wells Fargo Securities LLC, BNY Mellon Capital Markets LLC, KeyBanc Capital Markets, MUFG
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| Co-managers: | BofA Merrill Lynch, Fifth Third Securities Inc., PNC Capital Markets LLC, RBC Capital Markets, LLC
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| Trade date: | May 11
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| Settlement date: | May 18
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| Ratings: | Moody’s: Baa1
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| Standard & Poor’s: BBB
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| Distribution: | SEC-registered
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| 10-year notes
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| Amount: | $300 million
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| Maturity: | June 1, 2025
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| Coupon: | 3.4%
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| Price: | 99.645
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| Yield: | 3.442%
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| Spread: | 120 bps
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| Price guidance: | 125 bps area, tightened from 125 bps to 130 bps
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| Make-whole call: | 20 bps prior to March 1, 2025, then callable at par
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| 30-year bonds
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| Amount: | $350 million
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| Maturity: | June 1, 2045
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| Coupon: | 4.45%
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| Price: | 99.277
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| Yield: | 4.494%
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| Spread: | 150 bps
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| Price guidance: | 155 bps area, tightened from 155 bps to 160 bps
|
| Make-whole call: | 25 bps prior to Dec. 1, 2044, then callable at par
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