Duke Energy Prices Perpetual Preferred-UPDATE

The OTC Grey market ticker is changed to DUEKL.

Giant utility Duke Energy (NYSE:DUK) has priced a new offering of preferred stock with a fixed coupon rate of 5.75%. The early redemption period start in 6/2024.

The company is offering a massive 40 million shares (a cool billion dollars worth).

The OTC Grey market ticker is DUEK–and it is trading now on that marketplace–we see 104,000 traded today but at an unspecified price.

The pricing term sheet is here.

The preliminary prospectus is here.

As we expected the issue is rated investment grade – Baa3 by Moodys and BBB by S&P. Fitch assigns it a BBB-.

It is likely this will be a popular issue–and we are considering a small amount, but we need to consider whether the baby bonds at 5.625% (DUKB) would be a better buy being slightly higher rated and trading at $25.15 right now.

22 thoughts on “Duke Energy Prices Perpetual Preferred-UPDATE”

  1. It traded as DUEK yesterday. At FINRA OTC’s Daily List of “Symbol Changes,” there is a record of DUEK change to DUEK (same symbol so do not understand), and another entry, effective at midnight today (March 26th), from DUEK to DUEKL. Latter one does not have proper description if one clicks on doc icon on right. Anyone understands why they would change symbol?
    Here is the link:
    https://otce.finra.org/otce/dailyList?viewType=Symbol%2FName%20Changes
    Update “Start” date to 03/25/2019

    1. DUEK to DUEK symbol change conveys (in doc on right):
      Subject to Corporate Action: CA

      DUEK to DUEKL conveys: “Appending L To symbol” so it should be the real thing. And reason for doubt (other than lack of caffeine) is I may have recently spotted other Duke filings of short term notes.

  2. I tried to put an order in to buy both MRBPP (yesterday) and DUEKL (today) at Merrill Edge and both rejected for “low priced security restriction”. I was traveling yesterday and could not find the time to call ME to get further clarification. When I called a moment ago the ME random broker (my broker is on maternity leave) told me they are unable to buy either of these section my accounts because they did not underwrite them and are not authors buy securities on the “Over the Counter markets”… So I put in both buys at Vanguard who gladly took my trades. BTW, I am bidding both under where they are trading currently.
    Wishing you profitable investing, Nomad

    1. At what price were you able to pick up MRBPP? I have an order in now but its not getting filled. Thanks

      1. i have an order in for MRBPP at $25.01 (@fidelity) but there are no sellers. I have not seen that before.

        1. It is almost as if the underwriters want to tease the bidders and got the price up. That tactic is a non-starter for me. In fact, it is a yellow flag

            1. The day started off at a bid of $25.01 for MBRPP and it is now up to $25.17. To me, they are withholding the trading to force the price up.

              1. SteveA, was just told there was supposed to be a large institutional buying to support by buying a chunk of the MRBPP out of the gate by 12 PM today. They did not commit to any shares as the large bidder faded away. This may be why the underwriter hasn’t let it trade much so far. Stay Tuned, Nomad

                  1. This is the strangest preferred share offering I ever remember. It took over a week to price and now it has not traded in two days except for 2200 shares at today’s open. I have a bid in at $25.10

                  2. I only see 1 trade today, 2200 @$25.01 at 9:30:41 AM and I believe you are right that it’s best to be cautious and let the preferred come to your price. We all should be a bit reticent to chase right now as the common equity, preferred and bond market have all rallied hard this year.
                    Wishing you profitable investing, Nomad

                    1. Guys, I was noticing the lack of activity on this and humored myself on golf course since I was playing so bad. I put a test bid out for 100 shares at $25.40 and it was ignored. I dont want them at that price and wont do that again and will patiently wait. But my attention was lacking on the course and it amused me to put that bid out.

    2. Nomad, I had to man up and pay $25.25 at the golf course on my phone for my DUEKL today. I dont know if I could have got in cheaper or not as ticker wasnt open before market open when I left for the links.

      1. Grid, sadly my litany of orders on DUEKL and MRBPP didn’t trade today. I will definitely be in there fighting it out to “capture” some shares tomorrow. The Duke IPO Preferred is a massive issue and the underwriters had many institutional accounts that wanted shares for their clients and funds, so the deal was upsized. Years ago, I owned 2 seperate Duke preferreds that yielded well over 7% and at the time I thought the rate was a bit short (my how times have changed). MRBPP is a tiny issue of just 2 million shares/$50 million dollars and the liquidity will be quite low.
        Not all those who wander are lost, Nomad

        1. MRBPP what are they doing? The last time, I saw this last year, the whole offering became a private placement (forgot what the issue was). I wonder if that’s what they are trying to negotiate

  3. days range as of 9:43am is 25.06 – 25.20 with 5.6M shares traded according to etrade.

    Right now, I am holding

      1. I am not one to chase new issues but I did just buy 1600 shares of DUEKL at 25.20 through Schwab. I’m a girl who hates to over-pay…..I love a good sale…..but I need solid QDI issues to hold and so I paid up for this one.

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