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CenterPoint Energy offers $1.5B of notes to fund Vectren deal

CenterPoint Energy Inc. has sold $1.5 billion of senior notes in three tranches to fund its pending acquisition of Vectren Corp.

The securities consist of $500 million of 3.60% notes due Nov. 1, 2021, $500 million of 3.85% notes due Feb. 1, 2024, and $500 million of 4.25% notes due Nov. 1, 2028, according to company filings. Interest on the 2021 and 2028 notes is payable May 1 and Nov. 1 of each year, beginning May 1, 2019. The company will pay interest on the 2024 notes on Feb. 1 and Aug. 1 of each year, starting Feb. 1, 2019.

The spread to benchmark Treasury is 67 basis points for the 2021 notes, 85 basis points for the 2024 notes and 115 basis points for the 2028 notes. The issue was expected to be rated Baa1 by Moody's, BBB+ by S&P Global Ratings and BBB by Fitch Ratings.

Prior to this offering, CenterPoint Energy had raised close to $3.3 billion of equity to fund the Vectren deal. The company expects to issue a total of $3.5 billion in debt issued prior to close.

Goldman Sachs & Co. LLC, Morgan Stanley & Co. LLC, Mizuho Securities USA LLC, MUFG Securities Americas Inc., RBC Capital Markets LLC, PNC Capital Markets LLC, Regions Securities LLC, TD Securities (USA) LLC and U.S. Bancorp Investments Inc. acted as joint book-running managers. BNY Mellon Capital Markets LLC and Comerica Securities Inc. served as senior co-managers, while Guggenheim Securities LLC and Loop Capital Markets LLC acted as co-managers.

S&P Global Ratings and S&P Global Market Intelligence are owned by S&P Global Inc.