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Utility Entergy Texas Comes a Calling–UPDATED PRICING

UPDATE–They garnered a 1.75% coupon on the new issue–maturity in 2031.

Pricing term sheet can be found here.

Entergy Texas will be calling some or all of their 5.625% 1st Mortgage baby bonds due 2064 (EZT). These 1st became callable 6/1/2019.

The company will be selling some 1st mortgage $1,000 bonds with proceeds to be used in the redemption.

EZT had traded as high as $27/share a month ago–but had drifted lower in the last month to now trade at $25.40

The prospectus with the ‘use of proceeds’ statement can be found here.

With the various recent calls everyone should be on notice that these utilities will be calling issues when possible with proceeds from low coupon bonds (2-3%)–and who can blame them.

9 thoughts on “Utility Entergy Texas Comes a Calling–UPDATED PRICING”

  1. I read a $ 600 million bond offering at 1.75% a portion of which will be used to redeem $125 million of 2.55% first mortgage bonds due 6-1-2021 at OR PRIOR TO MATURITY (Reference page S-3).
    After the 2 bond redemptions totaling $260 million still leaves approximately $340 million of proceeds for other purposes.

    We anticipate our net proceeds from the sale of the bonds will be approximately $ million after deducting underwriting discounts and commissions and estimated offering expenses payable by us. We intend to use the net proceeds we receive from the issuance and sale of the bonds (i) to repay some or all of our outstanding (a) $135,000,000 aggregate principal amount of First Mortgage Bonds, 5.625% Series due June 1, 2064 prior to maturity and (b) $125,000,000 aggregate principal amount of First Mortgage Bonds, 2.55% Series due June 1, 2021 at or prior to maturity, and (ii) for general corporate purposes. Pending the application of the net proceeds of the bonds, we will invest them in short-term, highly liquid, high-rated money market instruments and/or the Entergy System money pool.

  2. Just bought some Corporate Bonds:
    Disney 2.75% maturity 2049
    J&J 2.25% maturity Sept 2050
    Visa 2% maturity Sept 2050
    All were selling below par so yield is a bit higher than the coupon and no early call dates.
    I thought I was half nuts for buying into these durations but after seeing this Entergy Texas Baby Bond, I’m not feeling so bad.

  3. They issued bonds with a 2% coupon? And they are calling them early? Man, this world is nuts.

      1. The 2.55% bonds listed in the use of proceeds section. Mature in 2021 but want to call them 6 months early.

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