By Mary-Katherine Stinson and Cristal Cody
Lexington, Ky., Feb. 27 – Pacific Gas & Electric Co. priced two fixed-rate first mortgage bonds and an add-on to its 6.75% first mortgage bonds due 2053 (Baa2/BBB/BBB), totaling $2.25 billion, according to a market source and an FWP filed with the Securities and Exchange Commission.
The cumulative final order books totaled $4.8 billion.
The $850 million of 5.55% first mortgage bonds due May 15, 2029 priced at 99.933 to yield 5.56%, or at Treasuries plus 125 basis points, after talk in the Treasuries plus 150 bps area.
PG&E sold $1.1 billion of 5.8% first mortgage bonds due May 15, 2034 at 99.876 to yield 5.813%, or 153 bps above Treasuries. Price talk was in the Treasuries plus 180 bps area.
The $300 million add-on to the 6.75% first mortgage bonds due Jan. 15, 2053 was the second additional offering, with the terms the same as the original $750 million of notes issued on Jan. 4, 2023 and the $500 million of notes issued on June 1, 2023.
The additional notes priced at 108.696 plus accrued interest totaling $2,418,750 from Jan. 15 to yield 6.101%, or at Treasuries plus 170 bps. Price talk was in the Treasuries plus 195 bps area.
Initially, the 2029 notes and the 2034 notes will be callable at Treasuries plus 20 bps and 25 bps, respectively, until one month and three months before maturity and then after at par.
For the add-on, the terms are that the bonds are callable with a Treasuries plus 45 bps make-whole premium and then the par call starts July 15, 2052, six months before maturity.
Barclays, BMO Capital Markets Corp., BNP Paribas Securities Corp., BofA Securities, Inc., Citigroup Global Markets Inc., Mizuho Securities USA LLC, MUFG Securities Americas Inc. and SMBC Nikko Securities America, Inc. are listed as joint bookrunners.
Proceeds will be used to repay borrowings under the company’s utility revolving credit facility. As of Feb. 21, there was $2.35 billion outstanding on the credit facility with interest based on a floating rate currently at 7.17%.
The electric and natural gas utility is based in Oakland, Calif.
| Issuer: | Pacific Gas & Electric Co.
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| Amount: | $2.25 billion
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| Issue: | First mortgage bonds
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| Bookrunners: | Barclays, BMO Capital Markets Corp., BNP Paribas Securities Corp., BofA Securities, Inc., Citigroup Global Markets Inc., Mizuho Securities USA LLC, MUFG Securities Americas Inc. and SMBC Nikko Securities America, Inc.
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| Co-managers: | BNY Mellon Capital Markets, LLC, Loop Capital Markets LLC, CastleOak Securities, LP, Cabrera Capital Markets LLC and Mischler Financial Group, Inc.
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| Trustee: | Bank of New York Mellon Trust Co., NA
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| Counsel to issuer: | Hunton Andrews Kurth LLP
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| Counsel to underwriters: | Davis Polk & Wardwell LLP
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| Trade date: | Feb. 26
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| Settlement date: | Feb. 28
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| Ratings: | Moody’s: Baa2
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| S&P: BBB
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| Fitch: BBB
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| 2029 bonds
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| Amount: | $850 million
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| Maturity: | May 15, 2029
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| Coupon: | 5.55%
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| Price: | 99.933
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| Yield: | 5.56%
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| Spread: | Treasuries plus 125 bps
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| Call features: | At Treasuries plus 20 bps before April 15, 2029; after at par
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| Price talk: | Treasuries plus 150 bps area
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| Cusip: | 694308KQ9
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| 2034 bonds
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| Amount: | $1.1 billion
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| Maturity: | May 15, 2034
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| Coupon: | 5.8%
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| Price: | 99.876
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| Yield: | 5.813%
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| Spread: | Treasuries plus 153 bps
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| Call features: | At Treasuries plus 25 bps before Feb. 15, 2034; after at par
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| Price talk: | Treasuries plus 180 bps area
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| Cusip: | 694308KR7
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| 2053 add-on
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| Amount: | $300 million
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| Maturity: | Jan. 15, 2053
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| Coupon: | 6.75%
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| Price: | 108.696 plus accrued interest of $2,418,750 from Jan. 15
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| Yield: | 6.101%
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| Spread: | Treasuries plus 170 bps
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| Call features: | At Treasuries plus 45 bps before July 15, 2052; after at par
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| Price talk: | Treasuries plus 195 bps area
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| Cusip: | 694308KH9
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| Total issue size: | $1.55 billion, including $750 million issued on Jan. 4, 2023 and $500 million issued on June 5, 2023
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