Ameren Missouri Announces Pricing of Green First Mortgage Bonds due 2055

Rhea-AI Summary

Ameren Missouri, a subsidiary of Ameren (NYSE: AEE), has priced a public offering of $450 million aggregate principal amount of 5.125% first mortgage bonds due 2055 at 99.881% of their principal amount. The transaction is expected to close on Oct. 7, 2024. The company plans to use the net proceeds to refinance short-term debt and/or fund near-term capital expenditures, with an intention to allocate an equal amount to sustainable projects meeting certain eligibility criteria.

The offering is being managed by Barclays Capital Inc., BofA Securities, Inc., J.P. Morgan Securities , Morgan Stanley & Co. , and KeyBanc Capital Markets Inc. as joint book-running managers. Ameren Missouri, which has been providing electric and gas service for over 100 years, serves 1.2 million electric and 135,000 natural gas customers in central and eastern Missouri.

Positive

• Successful pricing of $450 million green first mortgage bonds
• Bonds priced at 99.881% of principal amount, indicating strong investor interest
• Proceeds to be used for refinancing short-term debt and funding capital expenditures
• Allocation of proceeds to sustainable projects, aligning with ESG trends

Negative

• Increase in long-term debt with 5.125% interest rate until 2055

Insights

Financial Analyst

Ameren Missouri's $450 million green bond offering is a significant financial move with several implications:

• The 5.125% interest rate for 30-year bonds is relatively attractive in the current market, indicating investor confidence in Ameren's long-term stability.
• The $450 million raised will provide substantial capital for refinancing and funding capital expenditures, potentially improving Ameren's financial flexibility.
• The "green" designation aligns with growing ESG trends, potentially attracting a broader investor base and enhancing Ameren's sustainability profile.
• The slight discount (99.881% of principal) suggests a minor concession to attract investors, but overall indicates strong demand.

This offering should positively impact Ameren's balance sheet and support its long-term growth strategies in sustainable energy projects.

Utilities Sector Specialist

This bond issuance reflects broader trends in the utilities sector:

• Utilities are increasingly tapping into green bonds to fund sustainable projects, aligning with regulatory pressures and investor demand for ESG-focused investments.
• The long maturity (2055) is typical for utility infrastructure investments, matching long-term assets with long-term financing.
• The 5.125% coupon rate is competitive, potentially lowering Ameren's overall cost of capital compared to shorter-term debt.
• This move could enhance Ameren's ability to invest in grid modernization and renewable energy projects, important for future competitiveness in the evolving energy landscape.

Overall, this issuance positions Ameren Missouri well within the sector's shift towards sustainable financing and long-term infrastructure investment.

ST. LOUIS, Sept. 30, 2024 /PRNewswire/ -- Union Electric Company, doing business as Ameren Missouri, a subsidiary of Ameren Corporation (NYSE: AEE), announced today the pricing of a public offering of $450 million aggregate principal amount of 5.125% first mortgage bonds due 2055 at 99.881% of their principal amount. The transaction is expected to close on Oct. 7, 2024, subject to the satisfaction of customary closing conditions.

Ameren Missouri intends to use the net proceeds of the offering to refinance short-term debt and/or fund near-term capital expenditures. Thereafter, Ameren Missouri intends to allocate an amount equal to the net proceeds to sustainable projects meeting certain eligibility criteria.

Barclays Capital Inc., BofA Securities, Inc., J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC and KeyBanc Capital Markets Inc. are acting as joint book-running managers for the offering.

The offering is being made only by means of a prospectus and related prospectus supplement. A prospectus supplement related to the offering will be filed with the Securities and Exchange Commission. Copies of the prospectus and related prospectus supplement for the offering, when available, may be obtained via the Securities and Exchange Commission's website at www.sec.gov or by contacting J.P. Morgan Securities LLC, 383 Madison Avenue, New York, New York 10179, Attention: Investment Grade Syndicate Desk, Telephone: 1-212-834-4533.

This press release does not constitute an offer to sell or a solicitation of an offer to buy the first mortgage bonds and shall not constitute an offer, solicitation or sale in any jurisdiction in which, or to any person to whom, such an offer, solicitation or sale is unlawful.

About Ameren Missouri

Ameren Missouri has been providing electric and gas service for more than 100 years. Ameren Missouri's mission is to power the quality of life for its 1.2 million electric and 135,000 natural gas customers in central and eastern Missouri. The company's service area covers 64 counties and more than 500 communities, including the greater St. Louis area.

 

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SOURCE Ameren Missouri

FAQ

What is the amount and interest rate of Ameren Missouri's new green first mortgage bonds (AEE)?

Ameren Missouri (NYSE: AEE) has priced $450 million aggregate principal amount of 5.125% first mortgage bonds due 2055.

When is the expected closing date for Ameren Missouri's bond offering (AEE)?

The transaction for Ameren Missouri's (NYSE: AEE) green first mortgage bonds is expected to close on October 7, 2024.

How does Ameren Missouri plan to use the proceeds from the bond offering (AEE)?

Ameren Missouri (NYSE: AEE) intends to use the net proceeds to refinance short-term debt, fund near-term capital expenditures, and allocate an equal amount to sustainable projects meeting certain eligibility criteria.

Which firms are acting as joint book-running managers for Ameren Missouri's bond offering (AEE)?

Barclays Capital Inc., BofA Securities, Inc., J.P. Morgan Securities , Morgan Stanley & Co. , and KeyBanc Capital Markets Inc. are acting as joint book-running managers for Ameren Missouri's (NYSE: AEE) bond offering.