Negotiating Loan Terms

April 19, 2013 09:47 by Bill Conway in Financing  //  Tags: ,   //   Comments (0)
Most of our recent posts have been about loan pricing and structure, which should come as no surprise to most of you. This is THE topic for banks right now, from rural community banks to the Wall Street megabanks. This means it is also the primary topic in our strategy discussions with clients. Our Flex Loan program is certainly helping clients book longer loans without the interest rate risk, but many are still facing hurdles on prepayment language and prices that translate to spreads under 200 basis points. I had this on my mind when I saw this post from Seth Godin's blog called "Avoiding the Custom Bully." [More]

Bond Market Dashboard - September 14, 2012

September 17, 2012 09:39 by David Patterson in Financing  //  Tags: ,   //   Comments (0)
The following is the Bond Market Dashboard for September 14, 2012.  

Tennessee Valley Authority (TVA) Issued 10 Year Global Power Bonds at 1.875%

September 14, 2012 10:08 by David Patterson in Financing  //  Tags:   //   Comments (0)
According to TVA's Form 8-K, TVA entered into an agreement to issue $1.0 billion of its 1.875% Global Power Bonds 2012 Series A Due August 15, 2022.  To view the full Form 8-K, click here.

Union Electric Issued $450 million First Mortgage Bonds

September 12, 2012 11:34 by Bill Conway in Financing  //  Tags:   //   Comments (0)
According to Ameren Corporation's Form 8-K, Union Electric, doing business as Ameren Missouri, a subsidiary of Ameren Corporation, issued and sold $485,000,000 principal amount of its 3.90% Senior Secured Notes due 2042, pursuant to a Registration Statement on Form S-3 (File No. 333-182258-02), which became effective on June 21, 2012, and a Prospectus Supplement dated September 6, 2012 to a Prospectus dated June 21, 2012.  Ameren Missouri received net offering proceeds of approximately $478.2 million, before expenses, upon the closing of the transaction.  Ameren Missouri intends to use the net offering proceeds, together with other available cash, to provide the total amount of funds required to complete its previously announced tender offer (the “Tender Offer”) to repurchase for cash its outstanding 6.00% Senior Secured Notes due 2018 (the “6.00% Notes”), 6.70% Senior Secured Notes due 2019 (the “6.70% Notes”), 5.10% Senior Secured Notes due 2018 (the “2018 5.10% Notes”) and 5.10% Senior Secured Notes due 2019 (the “2019 5.10% Notes” and, together with the 6.00% Notes, the 6.70% Notes and the 2018 5.10% Senior Notes, the “Tender Offer Notes”), including the payment of interest on the Tender Offer Notes purchased thereunder and all related fees and expenses. The maximum aggregate purchase price (including principal and premium) for the Tender Offer Notes will be $377 million (the “Maximum Tender Amount”).  Ameren Missouri also expects to use the net proceeds from the offering of the New Notes to refinance $173,000,000 principal amount of its 5.25% senior secured notes that matured on September 1, 2012.  See the full report here...  

Dividend Battle May Force Consensus - Utilities benefit from current low rate

August 20, 2012 15:30 by Bill Conway in Accounting & Tax, Regulation  //  Tags:   //   Comments (0)
The outcome of the battle over tax reform and the resolution of the expiring tax cuts could impact how investor owned utilities secure future financing.  The timing of this potential change is not ideal, as utilities are incurring higher cost to develop and build infrastructure, in addition to complying with environmental and regulatory mandates.  As referenced in the article, utility stocks are historically known for above average dividend yields, creating a more efficient debt and equity or balanced capital structure for public utilities.  However, raising the capital gains tax rate on dividend paying stocks could reduce investor appeal, thus reducing a utilities ability to issue new shares and increasing the reliance on debt to fund future projects and expansion opportunities.   To learn more, click here.  

NiSource Issues $750 Million of Long-Term Debt

August 1, 2012 16:15 by David Patterson in Financing  //  Tags:   //   Comments (0)
NiSource issued $250 million of 3.85% Notes due February 2023 and $500 million of 5.25% Notes due February 2043.  NiSource is rated BBB- by S&P and Fitch and Baa3 by Moody’s.  Read more…

Proposed Legislation on How Electric Coops Make Decisions

July 19, 2012 08:35 by Bill Conway in Cooperatives, Financing, Regulation  //  Tags: , , , ,   //   Comments (0)
The draft legislation including the disclosure of power demand / load and forecasting information at the distribution level and requiring a G&T to secure approval from two-thirds of its members prior to entering into debt or energy contracts seem to be in line with what a cooperatives board role should be, that of protecting the member’s interest.  Read more...    

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