By William Gullotti
Buffalo, N.Y., Feb. 13 – Consumers Energy Co. priced $700 million of 4.625% 10-year first mortgage bonds (A1/A/A+) on Monday at a spread of 97 basis points over Treasuries, according to an FWP filing and a 424B3 filing with the Securities and Exchange Commission.
The bonds priced at 99.451 to yield 4.691%.
The bonds can be called with a make-whole premium of Treasuries plus 15 bps until Nov. 15, 2032. Thereafter, they can be called at par.
Barclays, BofA Securities, Inc., Mizuho Securities USA LLC, Citigroup Global Markets Inc., PNC Capital Markets LLC, SMBC Nikko Securities America, Inc. and Truist Securities, Inc. are the joint bookrunning managers for the offering.
Proceeds will be used to repay a portion of the $500 million aggregate principal amount outstanding under the company’s term loan dated as of July 22, 2022 and for general corporate purposes.
The $1 billion term loan bears interest at an annual interest rate of SOFR plus 65 bps (a weighted average interest rate of 4.975%) and matures on Jan. 22, 2024.
Consumers is a Jackson, Mich.-based public electric and gas utility and a subsidiary of CMS Energy Corp.
| Issuer: | Consumers Energy Co.
|
| Amount: | $700 million
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| Issue: | First mortgage bonds
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| Maturity: | May 15, 2033
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| Bookrunners: | Barclays, BofA Securities, Inc., Mizuho Securities USA LLC, Citigroup Global Markets Inc., PNC Capital Markets LLC, SMBC Nikko Securities America, Inc. and Truist Securities, Inc.
|
| Co-managers: | Comerica Securities, Inc. and Samuel A. Ramirez & Co., Inc.
|
| Trustee: | Bank of New York Mellon
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| Counsel to issuers: | In-house counsel and Sidley Austin LLP
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| Counsel to underwriters: | Pillsbury Winthrop Shaw Pittman LLP
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| Coupon: | 4.625%
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| Price: | 99.451
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| Yield: | 4.691%
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| Spread: | Treasuries plus 97 bps
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| Call features: | Make-whole call at Treasuries plus 15 bps until Nov. 15, 2032; thereafter at par
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| Trade date: | Feb. 13
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| Settlement date: | Feb. 23
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| Ratings: | Moody’s: A1
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| S&P: A
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| Fitch: A+
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| Distribution: | SEC registered
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| Cusip: | 210518DU7
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