By Paul A. Harris
St. Louis, Mo., June 28 -Aquila, Inc. priced $500 million of 10-year senior unsecured notes at a 440 basis points spread over Treasuries on Friday.
Sources have told Prospect News that despite the firm's investment-grade ratings of BBB from Moody's Investors Service and Baa3 from Standard & Poor's Aquila would essentially be a high-yield deal.
The notes, due July 1, 2012, priced Friday at 99.255 to yield 11%, according to syndicate sources.
Credit Suisse First Boston and UBS Warburg were the joint leads. Banc One Capital Markets, BMO Nesbitt Burns, RBC and TD Securities were co-managers.
On Thursday Aquila priced 37,500,000 primary shares of common stock at $7.50.
In a press release Friday the Kansas City, Mo.-based energy company stated that "combined with the pricing of Aquila's common stock offering [on June 27], this [senior unsecured notes] offering secures Aquila's capital market needs for 2002 including refinancing all 2002 debt maturities. It also increases Aquila's liquidity position while strengthening the company's credit profile."
| Issuer: | Aquila, Inc.
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| Amount: | $500 million
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| Maturity: | July 1, 2012
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| Type: | Senior unsecured notes
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| Managers: | Credit Suisse First Boston and UBS Warburg (joint leads)
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| Coupon: | 10 7/8%
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| Price: | 99.255
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| Yield: | 11%
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| Spread: | 440 basis points
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| Call features: | Callable with a T+50 make-whole call
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| Settlement date: | July 3, 2002
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| Ratings: | Moody's: Baa3
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| Standard & Poor's: BBB
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