Published on 2/27/2023 in the Prospect News Investment Grade Daily.
New Issue: PPL Capital prices $1.35 billion of 10-, 30-year first mortgage bonds
By Wendy Van Sickle and Cristal Cody
Columbus, Ohio, Feb. 27 – PPL Electric Utilities Corp. priced $1.35 billion of first mortgage bonds (A1/A+) in tranches due 2033 and 2053 on Monday, according to an FWP filing with the Securities and Exchange Commission and details from a market source.
A $600 million tranche of 5% bonds due 2033 priced with a spread of Treasuries plus 120 basis points, or 98.975 to yield 5.128%. Price talk was in the Treasuries plus 140 bps to 145 bps area.
The company also priced $750 million of 5.25% 30-year bonds at 145 bps over Treasuries. Pricing was at 97.977 to yield 5.385%. Spread talk was 165 bps to 170 bps area.
Barclays, PNC Capital Markets LLC, Scotia Capital (USA) Inc. and U.S. Bancorp Investments, Inc. are the joint bookrunners.
Proceeds will be used for general corporate purposes, including to repay the $250 million borrowed under the company’s term loan agreement dated September 2022, to repay short-term debt and for general corporate purposes, which may include repayment, in whole or in part, of PPL’s $250 million principal amount outstanding of floating-rate first mortgage bonds due 2023 and its $650 million principal amount of floating-rate first mortgage bonds due 2024.
The utility holding company is based in Allentown, Pa.
| Issuer: | PPL Electric Utilities Corp.
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| Amount: | $1.35 billion
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| Issue: | First mortgage bonds
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| Joint bookrunners: | Barclays, PNC Capital Markets LLC, Scotia Capital (USA) Inc. and U.S. Bancorp Investments, Inc.
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| Co-managers: | CIBC World Markets Corp., Huntington Securities, Inc., WauBank Securities LLC, Bancroft Capital, LLC, CastleOak Securities, LP, Loop Capital Markets LLC, Roberts and Ryan Investments, Inc. and Samuel A. Ramirez & Co., Inc.
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| Trustee: | Bank of New York Mellon
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| Counsel to issuer: | Bracewell LLP and in-house counsel
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| Counsel to underwriters: | Hunton Andrews Kurth LLP
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| Trade date: | Feb. 27
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| Settlement date: | March 2
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| Ratings: | Moody’s: A1
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| S&P: A+
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| Distribution: | SEC registered
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| Bonds due 2033
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| Amount: | $600 million
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| Maturity: | May 15, 2033
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| Coupon: | 5%
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| Price: | 98.975
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| Yield: | 5.128%
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| Spread: | Treasuries plus 120 bps
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| Make-whole call: | Treasuries plus 20 bps prior to Feb. 15, 2033, then callable at par
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| Price talk: | Treasuries plus 140 bps to 145 bps area
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| Cusip: | 69351UBA0
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| Bonds due 2053
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| Amount: | $750 million
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| Maturity: | May 15, 2053
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| Coupon: | 5.25%
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| Price: | 97.977
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| Yield: | 5.385%
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| Spread: | Treasuries plus 145 bps
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| Make-whole call: | Treasuries plus 25 bps prior to Nov. 15, 2052, then callable at par
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| Price talk: | Treasuries plus 165 bps to 170 bps area
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| Cusip: | 69351UBB8
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