By Rebecca Melvin and Cristal Cody
New York, March 9 – Pacific Gas & Electric Co. priced $2.4 billion of fixed-rate first mortgage bonds (Baa3/BBB-/BBB-) in three tranches, according to an FWP filed with the Securities and Exchange Commission.
A $1.5 billion tranche of 1.367% first mortgage bonds due March 10, 2023 priced at par with a spread over Treasuries of 120 basis points. The 2023 notes were talked with a spread in the Treasuries plus 130 bps area.
A $450 million tranche of 3.25% first mortgage bonds due June 1, 2031 priced at 99.788 to yield 3.275%, or a spread over Treasuries of 167 bps. The tranche was talked with a spread in the Treasuries plus 190 bps area.
The final $450 million of 4.2% first mortgage bonds due June 1, 2041 priced at 99.708 to yield 4.222%, or a spread over Treasuries of 200 bps. The tranche was talked with a spread in the Treasuries plus 230 bps area.
A fourth tranche of floating-rate coupon bonds was also expected to have priced, according to a market source, but pricing was not immediately available.
Early redemption options will vary for each series. The company may redeem the 2023 bonds after Sept. 10, 2021 at par plus interest. It may redeem the 2031 bonds prior to March 1, 2031 for par plus a make-whole premium of Treasuries plus 25 bps and it may redeem the 2041 bonds prior to Dec. 1, 2040 at par plus a make-whole premium of Treasuries plus 30 bps. For the 2031 and 2040 notes, after the make-whole premium date, the notes can be called at par plus interest.
BNP Paribas Securities Corp., Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, MUFG Securities Americas Inc., Mizuho Securities USA LLC and Wells Fargo Securities LLC were bookrunners for the bonds.
Co-managers were BMO Capital Markets Corp., BNY Mellon Capital Markets LLC, Academy Securities Inc., CastleOak Securities LP, Samuel A. Ramirez & Co. Inc., Cabrera Capital Markets LLC and R. Seelaus & Co. LLC.
Proceeds will be used to prepay in entirety a 364-day term loan facility in the amount of $1.5 billion with outstanding borrowings standing at $1 billion as of March 5 and repay all of the $845 million of borrowings under a utility revolving credit facility. Any remaining proceeds will be used for general corporate purposes.
The electric and natural gas utility is based in San Francisco.
| Issuer: | Pacific Gas & Electric Co.
|
| Amount: | $2.4 billion
|
| Description: | First mortgage bonds
|
| Bookrunners: | BNP Paribas Securities Corp., Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, MUFG Securities Americas Inc., Mizuho Securities USA LLC and Wells Fargo Securities LLC
|
| Co-managers: | BMO Capital Markets Corp., BNY Mellon Capital Markets LLC, Academy Securities Inc., CastleOak Securities LP, Samuel A. Ramirez & Co. Inc., Cabrera Capital Markets LLC and R. Seelaus & Co. LLC
|
| Trade date: | March 8
|
| Settlement date: | March 11
|
| Ratings: | Moody’s: Baa3
|
| S&P: BBB-
|
| Fitch: BBB-
|
| Distribution: | SEC registered
|
|
|
| 2023 Bonds
|
| Amount: | $1.5 billion
|
| Maturity: | March 10, 2023
|
| Coupon: | 1.367%
|
| Price: | Par
|
| Yield: | 1.367%
|
| Spread: | Treasuries plus 120 bps
|
| Call feature: | After Sept. 10, 2021 at par plus interest
|
| Talk: | Treasuries plus 130 bps area
|
|
|
| 2031 Bonds
|
| Amount: | $450 million
|
| Maturity: | June 1, 2031
|
| Coupon: | 3.25%
|
| Price: | 99.788
|
| Yield: | 3.275%
|
| Spread: | Treasuries plus 167 bps
|
| Call feature: | Make-whole premium prior to March 1, 2031 at Treasuries plus 25 bps; thereafter at par
|
| Talk: | Treasuries plus 190 bps area
|
|
|
| 2041 Bonds
|
| Amount: | $450 million
|
| Maturity: | June 1, 2041
|
| Coupon: | 4.2%
|
| Price: | 99.708
|
| Yield: | 4.222%
|
| Spread: | Treasuries plus 200 bps
|
| Call feature: | Make-whole premium prior to Dec. 1, 2040 at Treasuries plus 30 bps; thereafter at par
|
| Talk: | Treasuries plus 230 bps area
|
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