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Updated to include:
- BAML as green structuring agent
- bookrunners went out to market on 5 November
- oversubscribed deal
- statement by Suzanne Buchta, global head of ESG capital markets at BAML
- proceeds from green bonds to pay down intercompany debt
Duke Energy became the latest US utility to issue green bonds when it priced a $1 billion dual-tranche offering last week (November 2018).
Bank of America Merrill Lynch, BNP Paribas, MUFG Bank, Scotia Capital and TD Securities were the bookrunners on the deal, which was issued through the Charlotte, North Carolina-based utility group's Duke Energy Carolinas subsidiary. BAML was green structuring agent.
The US Securities and Exchange Commission-registered deal comprised a $350 million, 3.5-year tranche and a $650 million, 10-year tranche.
The bookrunners went out to the market on 5 November (2018) with initial thoughts of 55-60bp over Treasurys for the shorter tranche and 90-95bp for the longer, and attracted over $3 billion of orders.
Guidance was set much tighter, at 38-42bp and 80bp, and the bonds priced at 38bp and 80bp. The deal remained more than twice subscribed at the tighter pricing.
The final pricing was roughly in line with the existing yield curve for the issuer across the two tranches – a...