By Mary-Katherine Stinson and Cristal Cody
Lexington, Ky., June 2 – Pacific Gas and Electric Co. priced $2.5 billion of bonds in an add-on offering of 6.75% first mortgage bonds due Jan. 15, 2053 and two additional new tranches of first mortgage bonds (Baa3/BBB-/BBB), according to an FWP filed with the Securities and Exchange Commission.
The $850 million of 6.1% first mortgage bonds due Jan. 15, 2029 priced at 99.96 to yield 6.106%, or at Treasuries plus 240 basis points. Price talk was in the 270 bps area.
The $1.15 billion of 6.4% first mortgage bonds due June 15, 2033 priced at 99.909 to yield 6.412%, or at Treasuries plus 280 bps versus talk in the 310 bps area.
The add-on offering of $500 million of 6.75% first mortgage bonds due Jan. 15, 2053 priced at 96.919, plus accrued interest of $13,968,750 from Jan. 6, to yield 6.997%, or at Treasuries plus 315 bps after talk started in the 345 bps area.
The terms of the 2053 mortgage bonds, other than their issue date, the initial interest accrual date and public offering price, are identical to the terms of the $750 million of 6.75% first mortgage bonds due 2053 offered and sold on Jan. 4. They will trade interchangeably with the existing 2053 mortgage bonds of the same series immediately upon settlement.
The add-on bonds will accrue interest from, and including, Jan. 6.
Each of the mortgage bonds feature a make-whole call option followed by a par call option.
Before Dec. 15, 2028, one month prior to the maturity date, the 2029 bonds will be callable with a Treasuries plus 40 bps make-whole premium and after at par.
The 2033 bonds feature a make-whole call prior to March 15, 2033, three months prior to maturity, with a premium of Treasuries plus 45 bps and after at par.
The 2053 bonds feature a make-whole call before July 15, 2052, six months prior to maturity, with a premium of Treasuries plus 45 bps followed by a par call.
Barclays, BofA Securities, Inc., Goldman Sachs & Co. LLC, J.P. Morgan Securities LLC, BMO Capital Markets Corp., Citigroup Global Markets Inc. and Credit Suisse Securities (USA) LLC are the joint bookrunners.
Proceeds will be used to repay all $375 million of 3.25% first mortgage bonds due June 15 and the $500 million of 4.25% first mortgage bonds due Aug. 1 at maturity. PG&E expects to use the remaining net proceeds from the offering for general corporate purposes, including the repayment of borrowings outstanding under a utility revolving credit facility.
As of May 22, borrowings under the revolver totaled about $1.36 billion.
The electric and natural gas utility is based in San Francisco.
| Issuer: | Pacific Gas and Electric Co.
|
| Amount: | $2.5 billion
|
| Issue: | First mortgage bonds
|
| Bookrunners: | Barclays, BofA Securities, Inc., Goldman Sachs & Co. LLC, J.P. Morgan Securities LLC, BMO Capital Markets Corp., Citigroup Global Markets Inc. and Credit Suisse Securities (USA) LLC
|
| Co-managers: | AmeriVet Securities, Inc., Loop Capital Markets LLC, MFR Securities, Inc. and R. Seelaus & Co., LLC
|
| Trustee: | Bank of New York Mellon Trust Co., NA
|
| Counsel to issuer: | Hunton Andrews Kurth LLP
|
| Counsel to bookrunners: | Davis Polk & Wardwell LLP
|
| Trade date: | June 1
|
| Settlement date: | June 5
|
| Ratings: | Moody’s: Baa3
|
| S&P: BBB-
|
| Fitch: BBB
|
|
|
| 2029 bonds
|
| Amount: | $850 million
|
| Maturity: | Jan. 15, 2029
|
| Coupon: | 6.1%
|
| Price: | 99.96
|
| Yield: | 6.106%
|
| Spread: | Treasuries plus 240 bps
|
| Call features: | Make-whole call before Dec. 15, 2028 at Treasuries plus 40 bps; after at par
|
| Price talk: | Treasuries plus 270 bps area
|
| Cusip: | 694308KL0
|
|
|
| 2033 bonds
|
| Amount: | $1.15 billion
|
| Maturity: | June 15, 2033
|
| Coupon: | 6.4%
|
| Price: | 99.909
|
| Yield: | 6.412%
|
| Spread: | Treasuries plus 280 bps
|
| Call features: | Make-whole call before March 15, 2033 at Treasuries plus 45 bps; after at par
|
| Price talk: | Treasuries plus 310 bps area
|
| Cusip: | 694308KM8
|
|
|
| 2053 bonds
|
| Amount: | $500 million
|
| Maturity: | Jan. 15, 2053
|
| Coupon: | 6.75%
|
| Price: | 96.919 plus accrued interest of $13,968,750 from Jan. 6
|
| Yield: | 6.997%
|
| Spread: | Treasuries plus 315 bps
|
| Call features: | Make-whole call before July 15, 2052 at Treasuries plus 45 bps; after at par
|
| Price talk: | Treasuries plus 345 bps area
|
| Cusip: | 694308KH9
|
| Total issue size: | $1.25 billion, including $750 million issued on Jan. 4
|
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