PPL tightens talks on $900 million five-year exchangeable notes to 2.875%-3.125%, up 22.5%

By Abigail W. Adams

Portland, Me., Feb. 21 – PPL Capital Funding Inc., a subsidiary of PPL Corp., tightened talk on its $900 million offering of five-year exchangeable notes, which is slated to price after the market close on Tuesday, to a coupon of 2.875% to 3.125% and an initial exchange premium of 22.5%, according to a market source.

Initial price talk was for a coupon of 3% to 3.5% and an initial exchange premium of 20% to 25%, according to a market source.

Morgan Stanley & Co. LLC and J.P. Morgan Securities LLC are bookrunners for the Rule 144A offering which carries a greenshoe of $100 million.

The notes are non-callable until March 20, 2026 and then subject to a 130% hurdle.

They are putable upon a fundamental change. There is dividend protection above 24 cents per quarter.

The notes will be settled in cash up to the principal amount with any remaining amount to be settled in cash, shares or a combination of both at the company’s option.

Proceeds will be used to repay the company’s short-term straight debt and for general corporate purposes.

PPL is an Allentown, Pa.-based energy company.

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