Power utility company Progress Energy Inc. (PGN) issued $500 million first mortgage bonds yielding 3.0% interest per year and maturing on September 15, 2021. The company has received a secure rating of ‘A1’ from Moody’s Investors Service, ‘A’ from Standard & Poor’s and ‘A+’ from Fitch Ratings for the new issue.
The offer price was $99.828 for the bonds (per $100.00 principal). The company intends to utilize the proceeds of the issue to repay short-term borrowings.
The company had outstanding long-term debts of $11.418 billion as of June 30, 2011, versus $11.864 billion as of December 31, 2010. The debt-to-capitalization ratio at the end of the second quarter was 53.9%, declining marginally from the year-end level of 54.95%.
Interest expenses of the company in the second quarter 2011 decreased 6.2% year over year. However, with the issue of new debt, interest expenses of the company are expected to escalate in the coming quarters.
Earlier, in January 2009, the company had issued $600 million worth of bonds, yielding 5.3% interest per year and maturing on January 15, 2019.
Progress Energy remained focused on operational excellence, cost discipline and managing the business effectively as it speeds up approvals and integration planning associated with its pending merger with Duke Energy Corp. (DUK).
Progress Energy Inc. currently retains a Zacks #3 Rank, which translates into a short-term Hold rating. The company competes with NextEra Energy Inc. (NEE) and Southern Company (SO).
Raleigh, North Carolina-based Progress Energy Inc. is an energy utility engaged in regulated electricity operations in the southeastern U.S. The company also has certain non-regulated businesses. Progress Energy is a holding company, parenting two electric utilities and serving 3.1 million customers in North Carolina, South Carolina and Florida.
