Published on 3/8/2021 in the Prospect News Investment Grade Daily.
New Issue: CenterPoint Energy sells $1.1 billion of general mortgage bonds in 10-, 30-year parts
By Wendy Van Sickle and Cristal Cody
Columbus, Ohio, March 8 – CenterPoint Energy Houston Electric, LLC priced $1.1 billion of general mortgage bonds (A2/A/A) in two tranches on Monday, according to an FWP filing with the Securities and Exchange Commission.
A $400 million tranche of 2.35% 10-year notes priced at 99.573 to yield 2.398%, or with a Treasuries plus 80 basis points spread.
Initial price talk was in the 95 bps area.
CenterPoint also sold a $700 million tranche of 3.35% 30-year notes priced at 99.603 to yield 3.371%, or a Treasuries plus 105 basis points spread. Price talk was in the 120 bps area.
Bookrunners were BNP Paribas Securities Corp., Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, TD Securities (USA) LLC, Wells Fargo Securities, LLC., BNY Mellon Capital Markets, LLC, Comerica Securities, Inc., RBC Capital Markets, LLC and Truist Securities, Inc.
Proceeds will be used for general limited liability company purposes, including capital expenditures and the repayment of all of the company’s outstanding $102 million of 9.15% first mortgage bonds March 15, 2021, all of its outstanding $300 million of 1.85% general mortgage bonds due June 1, 2021 and all or a portion of the borrowings under its money pool. On Dec. 31 the company had about $8 million of borrowings under the money pool at a weighted average annual interest rate of 0.24%.
The issuer is an indirect wholly owned subsidiary of CenterPoint Energy, Inc., an electric utility based in Houston.
| Issuer: | CenterPoint Energy Houston Electric, LLC
|
| Amount: | $1.1 billion
|
| Description: | General mortgage bonds
|
| Bookrunners: | BNP Paribas Securities Corp., Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, TD Securities (USA) LLC, Wells Fargo Securities, LLC., BNY Mellon Capital Markets, LLC, Comerica Securities, Inc., RBC Capital Markets, LLC and Truist Securities, Inc.
|
| Co-manager: | C.L. King & Associates, Inc.
|
| Trade date: | March 8
|
| Settlement date: | March 11
|
| Ratings: | Moody’s: A2
|
| S&P: A
|
| Fitch: A
|
| Distribution: | SEC registered
|
|
|
| 10-year notes
|
| Amount: | $400 million
|
| Maturity: | April 1, 2031
|
| Coupon: | 2.35%
|
| Price: | 99.573
|
| Yield: | 2.398%
|
| Spread: | Treasuries plus 80 bps
|
| Call option: | Make-whole call at Treasuries plus 15 bps until Jan. 1, 2031, par call thereafter
|
| Price talk: | Treasuries plus 95 bps area
|
|
|
| 30-year notes
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| Amount: | $700 million
|
| Maturity: | April 1, 2051
|
| Coupon: | 3.35%
|
| Price: | 99.603
|
| Yield: | 3.371%
|
| Spread: | Treasuries plus 105 bps
|
| Call option: | Make-whole call at Treasuries plus 20 bps until Oct. 1, 2050, par call thereafter
|
| Price talk: | Treasuries plus 120 bps area
|
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