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US power sector records 22% YOY dip in Q1 capital raises

U.S. electric utilities and power producers issued about $23.95 billion of securities during the first quarter, a decrease of $6.79 billion, or 22%, from $30.74 billion during the comparable quarter of 2021, according to data from S&P Global Market Intelligence. The total included $22.94 billion in senior debt, compared with $29.63 billion a year earlier.

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Florida Power & Light Co. was the largest issuer during the quarter, with $2.50 billion of debt securities issued. The NextEra Energy Inc. subsidiary sold $1.50 billion of 2.45% first mortgage bonds due Feb. 3, 2032, and $1 billion of floating-rate notes due Jan. 12, 2024, for general corporate purposes, such as repaying its outstanding commercial paper obligations.

Pacific Gas and Electric Co. came in second with the sale of $2.40 billion of first mortgage bonds in four transactions. The PG&E Corp. subsidiary sold $1 billion of 3.25% bonds due 2024, $400 million of 4.20% bonds due 2029, $450 million of 4.40% bonds due 2032 and $550 million of 5.25% bonds due 2052 to prepay loans under an 18-month term facility and to use for general corporate purposes.

Exelon Corp. sold $2 billion of debt securities during the quarter, comprising $650 million of its 2.750% notes due 2027, $650 million of its 3.350% notes due 2032 and $700 million of its 4.10% notes due 2052. The company plans to use a portion of the proceeds, with available cash, to repay its $1.15 billion of 3.497% junior subordinated notes due June 1, with the remainder used for general corporate purposes.

The list of largest debt issuers during the quarter also included NextEra Energy Capital Holdings Inc., Eversource Energy and Sempra.

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American Electric Power Co. Inc. remarketed $805 million of its 2.031% junior subordinated debentures due 2024. Proceeds will be used to purchase the treasury portfolio, a portion of which will then be pledged to secure the purchase contract obligations of the holders of the corporate units. Any remaining proceeds will be remitted ratably to holders of corporate units.

Allete Inc. completed an offering of $201.6 million of common stock, the sole equity offering for the sector during the first quarter. The utility sold 3.2 million common shares at $63 apiece to fund its acquisition of New Energy Equity LLC and to use for capital investments.

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