Integrated energy company Entergy Corporation (ETR) announced that its unit Entergy Louisiana, LLC will sell $206 million bonds through an underwritten public offering.
The company intends to utilize the proceeds to reimburse its previously incurred investment recovery costs.
Entergy Corporation’s long-term debts as of March 31, 2011 were $11.6 billion, slightly exceeding debt levels as of December 31, 2010. Accordingly, the debt-to-capital ratio at the end of the first quarter 2011 was 57.6% versus 57.3% at the end of 2010.
From time to time, Entergy has engaged in the issuing of debts to finance acquisitions and repay dues. In March 2011, Entergy Louisiana issued $200 million of 4.80% Series first mortgage bonds due May 2021 and utilized the proceeds, together with existing funds, to purchase Unit 2 of the Acadia Energy Center, a 580 megawatt (MW) generating unit located near Eunice, Louisiana.
In April 2011, Entergy Mississippi, another unit of Entergy Corporation, issued $150 million of 6.0% Series first mortgage bonds due May 2051 and used a portion of the proceeds to pay at maturity its $80 million 4.65% Series first mortgage bonds due May 2011.
Interest expenses in the first quarter 2011 declined 25.5% year over year to $127.6 million. However, with the issue of new bonds, the interest payment obligation of the company is expected to go up.
During the first quarter earnings call, Entergy provided earnings per share guidance for 2011 in the range of $6.35−$6.85. The Zacks Consensus Estimates for second-quarter 2011, fiscal year 2011 and fiscal year 2012 are $1.63, $6.60 and $6.13 per share, respectively.
Entergy Corporation currently retains a Zacks #3 Rank (short-term Hold rating). The company competes with American Electric Power Co. Inc. (AEP), CenterPoint Energy Inc. (CNP) and Southern Company (SO).
New Orleans, Louisiana based Entergy Corporation along with its subsidiaries engages in electric power production and retail electric distribution operations.
