By William Gullotti
Buffalo, N.Y., Feb. 26 – Potomac Electric Power Co. (Pepco) sold $675 million of fixed-rate first mortgage bonds in parts due 2034, 2054 (A2/A/A) on Monday, according to an FWP and a 424B2 filing with the Securities and Exchange Commission.
The first series totals $375 million with a 5.2% coupon, maturing in 2034. The 2034 bonds priced at 95 basis points over Treasuries, or 99.62, to yield 5.249%.
The 2054-maturing series totals $300 million and has a 5.5% coupon. The 2054 bonds priced at 99.866 to yield 5.509%, reflecting a 110 bps spread over Treasuries.
Each series features a make-whole call until some months prior to maturity, followed by a par call.
Goldman Sachs & Co. LLC, Scotia Capital (USA) Inc., U.S. Bancorp Investments, Inc., Barclays and Wells Fargo Securities, LLC are the joint bookrunning managers.
Proceeds will be used to refinance $400 million of first mortgage bonds due March 15, 2024 and to refinance $96 million of outstanding commercial paper borrowings with a 5.441% average interest rate, and the remainder will be applied to general corporate purposes.
Pepco is the Washington, D.C.-based subsidiary of Exelon. The company purchases and regulates the retail sale of electricity and transmits and distributes electricity to retail customers.
| Issuer: | Potomac Electric Power Co.
|
| Amount: | $675 million
|
| Issue: | First mortgage bonds
|
| Bookrunners: | Goldman Sachs & Co. LLC, Scotia Capital (USA) Inc., U.S. Bancorp Investments, Inc., Barclays and Wells Fargo Securities, LLC
|
| Senior co-managers: | BNY Mellon Capital Markets, LLC and Loop Capital Markets LLC
|
| Co-managers: | AmeriVet Securities, Inc., Blaylock Van, LLC and Multi-Bank Securities, Inc.
|
| Trustee: | Bank of New York Mellon Trust Co., NA
|
| Counsel to issuer: | Ballard Spahr LLP
|
| Counsel to underwriters: | Winston & Strawn LLP
|
| Trade date: | Feb. 26
|
| Settlement date: | March 4
|
| Ratings: | Moody’s: A2
|
| S&P: A
|
| Fitch: A
|
| Distribution: | SEC registered
|
|
|
| 2034 bonds
|
| Amount: | $375 million
|
| Maturity: | March 15, 2034
|
| Coupon: | 5.2%
|
| Price: | 99.62
|
| Yield: | 5.249%
|
| Spread: | Treasuries plus 95 bps
|
| Call: | Make-whole at Treasuries plus 15 bps until Dec. 15, 2033; par call thereafter
|
| Cusip: | 737679DH0
|
|
|
| 2054 bonds
|
| Amount: | $300 million
|
| Maturity: | March 15, 2054
|
| Coupon: | 5.5%
|
| Price: | 99.866
|
| Yield: | 5.509%
|
| Spread: | Treasuries plus 110 bps
|
| Call: | Make-whole at Treasuries plus 20 bps until Sept. 15, 2053; par call thereafter
|
| Cusip: | 737679DJ6
|
|
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