Published on 11/5/2015 in the Prospect News Investment Grade Daily.
New Issue: Westar Energy sells $550 million of mortgage bonds in 10-, 30-year tranches
By Aleesia Forni
Virginia Beach, Nov. 5 – Westar Energy, Inc. sold $550 million of first mortgage bonds (A2/A/A) in two tranches on Thursday, according to a market source and an FWP filed with the Securities and Exchange Commission.
There was a $250 million 10-year tranche of 3.25% bonds sold at 99.999 to yield 3.25%, or Treasuries plus 100 basis points.
Initial guidance was set in the Treasuries plus 112.5 bps area.
Also, $300 million of 4.25% 30-year mortgage bonds priced with a 125 bps spread over Treasuries. The notes sold at 99.594 to yield 4.274%.
Pricing was tighter than initial talk set in the 137.5 bps area over Treasuries.
BofA Merrill Lynch, BNY Mellon Capital Markets LLC, Citigroup Global Markets Inc. and Wells Fargo Securities LLC are the bookrunners.
Proceeds from the tranche due 2045 will be used to redeem $300 million of 8.625% mortgage bonds due 2018, while proceeds from the tranche of bonds due 2025 will be used to repay debt under a commercial paper program.
Westar Energy is a Topeka, Kan.-based electric utility.
| Issuer: | Westar Energy Inc.
|
| Issue: | First mortgage bonds
|
| Amount: | $550 million
|
| Bookrunners: | BofA Merrill Lynch, BNY Mellon Capital Markets LLC, Citigroup Global Markets Inc., Wells Fargo Securities LLC
|
| Trade date: | Nov. 5
|
| Settlement date: | Nov. 13
|
| Ratings: | Moody’s: A2
|
| Standard & Poor’s: A
|
| Fitch: A
|
| Distribution: | SEC registered
|
|
|
| 10-year bonds
|
| Amount: | $250 million
|
| Maturity: | Dec. 1, 2025
|
| Co-managers: | BNP Paribas Securities Corp., Regions Securities LLC, Samuel A. Ramirez & Company, Inc., TD Securities (USA) LLC
|
| Coupon: | 3.25%
|
| Price: | 99.999
|
| Yield: | 3.25%
|
| Spread: | Treasuries plus 100 bps
|
| Price talk: | Treasuries plus 112.5 bps area
|
| Make-whole call: | Treasuries plus 15 bps prior to Sept. 1, 2025, then callable at par
|
|
|
| 30-year bonds
|
| Amount: | $300 million
|
| Maturity: | Dec. 1, 2045
|
| Co-managers: | Barclays, J.P. Morgan Securities LLC, MUFG, U.S. Bancorp Investments, Inc.
|
| Coupon: | 4.25%
|
| Price: | 99.594
|
| Yield: | 4.274%
|
| Spread: | Treasuries plus 125 bps
|
| Price talk: | Treasuries plus 137.5 bps area
|
| Make-whole call: | Treasuries plus 20 bps prior to June 1, 2045, then callable at par
|
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