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DTE Energy To Sell Baby Bonds

Michigan utility DTE Energy (DTE) is coming to market with new junior subordinated debentures.

The company will call their junior subordinated debentures with a 5.25% coupon (DTQ). This issue has been callable since 2017 and is the only issue currently callable.

The company has numerous issues outstanding which can be seen here.

The preliminary prospectus for the new issue can be found here.

j was right on top of this new issue.

5 thoughts on “DTE Energy To Sell Baby Bonds”

  1. During the past few months I made an overweight utility sector bet by exiting the bonds and preferreds and moving into the convertibles. Two factors 1) the stuff sold was too far over par considering the likelihood of calls (i.e. DTE above) and 2) the beaten down values in sector common stock. Low rates are bad news on callable securities, but good news for utility common stock.

    While the utility sector has bounced somewhat, it’s still in value territory IMO. CNP-B, DTP, SOLN, SRE-B, AEP-B, NEE-P. Most are 2-4 years from convert or call and represented stepped up cash flow compared with the stuff sold. No free lunch, that benefit is due to the increased risk of capital loss at conversion.

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