By Paul Deckelman
New York, June 21 - Nevada Power Co. successfully brought a quickly-shopped two-part deal to market Wednesday, syndicate sources said. It priced add-on tranches totaling $195 million to two existing issues of general and refunding mortgage debt.
The Las Vegas-based utility company - a wholly owned subsidiary of Sierra Pacific Resources - priced a $75 million add-on to its $250 million of existing 6½% series O general and refunding mortgage notes due May 15, 2018. The add-on notes priced at 96.537 to yield 6.931%. That brings the amount of the notes to $325 million. The original notes were sold on May 9.
It also priced a $120 million add-on to its $250 million of existing 6.65% series N general and refunding mortgage notes due April 1, 2036, which had been sold on March 29. The new notes priced at 92.647 to yield 7.255%. That add-on brings the total amount of the notes outstanding to $370 million.
The Rule 144A deal came to market via joint book-running managers Goldman Sachs and Deutsche Bank Securities, plus co-managers Credit Suisse, Lehman Brothers, Merrill Lynch & Co., and Piper Jaffray & Co.
Nevada Power plans to use proceeds - expected to total about $180 million, once transaction expenses are factored out - to fund the purchase any of its $162.5 million of 10 7/8% series E general and refunding mortgage notes due 2009 which are tendered under a previously announced tender offer scheduled to expire next Wednesday, and to cover the fees and expenses associated of the offer.
It said that "a substantial portion" of the series E notes has already been tendered.
Completion of the offerings will satisfy the tender offer's financing condition.
Any remaining proceeds will be used to repay amounts outstanding under the company's revolving credit facility with Wachovia Bank, NA.
Nevada Power further said that the new notes, like its other general and refunding notes, will be secured by the a lien on substantially all of the company's real property and tangible personal property located in the state of Nevada.
Issuer: Nevada Power Co.
| Amount (both tranches): | $195 million
|
| Security description: | General and refunding mortgage notes add-on
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| Bookrunners (joint): | Goldman Sachs, Deutsche Bank Securities
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| Co-managers: | Credit Suisse, Lehman Brothers, Merrilll Lynch & Co., Piper Jaffray & Co.
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| Call: | Make-whole at Treasuries + 30 bps
|
| Settlement: | June 26
|
| Ratings: | Moody's: Ba1
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| S&P: BB
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| Fitch: BB+
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| Distribution: | Rule 144A
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|
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| Tranche 1:
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| Amount: | $75 million (brings outstanding amount to $325 million)
|
| Issue: | Series O general and refunding mortgage notes
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| Coupon: | 6½%
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| Price: | 96.537
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| Yield: | 6.931%
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| Spread: | 178 basis points over 10-year Treasuries
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|
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| Tranche 2:
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| Amount: | $120 million (brings outstanding amount to $370 million)
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| Issue: | Series N general and refunding mortgage notes
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| Coupon: | 6.65%
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| Price: | 92.647
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| Yield: | 7.255%
|
| Spread: | 200 basis points over 30-year Treasuries
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