Interstate Power and Light Company Prices Debt Offering

Rhea-AI Summary

Interstate Power and Light Company (IPL), a subsidiary of Alliant Energy (NASDAQ: LNT), has announced the pricing of its public debt offering. The offering consists of $350 million in 4.950% senior debentures due 2034 and $300 million in 5.450% senior debentures due 2054. IPL plans to use the proceeds to retire its $500 million 3.25% senior debentures maturing on December 1, 2024, and for general corporate purposes. The offering is expected to close on September 6, 2024, subject to customary conditions. The underwriting group includes Barclays Capital, Goldman Sachs, J.P. Morgan Securities, and MUFG Securities Americas as joint book-running managers, along with several co-managers.

Positive

• Successful pricing of $650 million in senior debentures
• Longer-term debt financing secured with maturities in 2034 and 2054
• Proceeds will be used to retire existing debt and for general corporate purposes

Negative

• Higher interest rates on new debentures compared to the retiring debt (4.950% and 5.450% vs. 3.25%)

Insights

Financial Analyst

Interstate Power and Light Company's (IPL) debt offering of $650 million in senior debentures is a strategic financial move with significant implications. The $350 million 4.950% debentures due 2034 and $300 million 5.450% debentures due 2054 offer long-term financing at relatively attractive rates, considering the current market conditions. This debt restructuring, aimed at retiring $500 million of 3.25% debentures due in 2024, indicates proactive liability management.

The higher interest rates on the new issuances reflect the current elevated rate environment but provide IPL with extended maturities, potentially reducing refinancing risk. The additional $150 million raised suggests a buffer for future capital needs or potential investments. For investors, this move demonstrates IPL's ability to access capital markets and manage its debt profile effectively, which is important for utility companies with significant infrastructure investments.

Market Research Analyst

The successful pricing of IPL's debt offering, especially in the current volatile market, signals strong investor confidence in the company and the utilities sector. The involvement of major underwriters like Barclays, Goldman Sachs, J.P. Morgan and MUFG adds credibility to the offering. The inclusion of co-managers like Academy Securities and Comerica Securities suggests a broad distribution strategy, potentially diversifying the investor base.

From a market perspective, this offering could set a benchmark for other utility companies looking to refinance or raise capital. The 4.950% and 5.450% rates for 10-year and 30-year terms, respectively, provide insight into the long-term interest rate expectations for investment-grade utility debt. This information is valuable for investors gauging the overall health and financing costs in the utility sector, which often serves as a barometer for broader economic trends.

$350 million in senior debentures will be due in 2034 and $300 million in senior debentures will be due in 2054

MADISON, Wis.--(BUSINESS WIRE)-- Interstate Power and Light Company (“IPL”), a wholly owned subsidiary of Alliant Energy Corporation (NASDAQ: LNT), announced the pricing of its public offering of $350 million aggregate principal amount of 4.950% senior debentures due 2034 and $300 million aggregate principal amount of 5.450% senior debentures due 2054. The 2034 senior debentures will be due on September 30, 2034. The 2054 senior debentures will be due on September 30, 2054. IPL intends to use the net proceeds from this offering to retire its $500 million aggregate principal amount of 3.25% senior debentures maturing on December 1, 2024 at or prior to maturity and for general corporate purposes. The closing of the offering is expected to occur on September 6, 2024, subject to the satisfaction of customary closing conditions.

The offering was marketed through a group of underwriters consisting of Barclays Capital Inc., Goldman Sachs & Co. LLC, J.P. Morgan Securities LLC, and MUFG Securities Americas Inc., as joint book-running managers, and Academy Securities, Inc., Comerica Securities, Inc., KeyBanc Capital Markets Inc. and U.S. Bancorp Investments, Inc. as co-managers.

The offering is being made only by means of a prospectus supplement and accompanying prospectus which are part of a shelf registration statement IPL filed with the Securities and Exchange Commission (the “Commission”). Copies may be obtained by calling Barclays Capital Inc. toll free at (888) 603-5847, Goldman Sachs & Co. LLC toll free at 1-866-471-2526, J.P. Morgan Securities LLC collect at 1-212-834-4533, or MUFG Securities Americas Inc. toll free at 1-877-649-6848. Electronic copies of these documents will be available from the Commission’s website at www.sec.gov.

This press release does not constitute an offer to sell or the solicitation of an offer to buy these securities, nor will there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

About Alliant Energy

Alliant Energy Corporation’s Iowa utility subsidiary, Interstate Power and Light Company (IPL), utilizes the trade name of Alliant Energy (NASDAQ:LNT). The Iowa utility is based in Cedar Rapids, Iowa.

Forward-Looking Statements

This press release includes forward-looking statements. These statements involve inherent risks and uncertainties that could cause actual results to differ materially from those projected or anticipated, including risks related to the proposed offering, the anticipated use of proceeds from the sale of the senior debentures and other risks outlined in IPL’s public filings with the Commission, including IPL’s most recent annual report on Form 10-K and subsequent Quarterly Reports on Form 10-Q. All information provided in this news release speaks as of the date hereof. Except as otherwise required by law, IPL undertakes no obligation to update or revise its forward-looking statements.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240905329147/en/

Media Hotline: (608) 458-4040

Investor Relations: Susan Gille: (608) 458-3956

Source: Alliant Energy Corporation

FAQ

What is the total value of Interstate Power and Light Company's new debt offering?

Interstate Power and Light Company's new debt offering totals $650 million, consisting of $350 million due in 2034 and $300 million due in 2054.

What are the interest rates for IPL's new senior debentures (LNT)?

The interest rates for IPL's new senior debentures are 4.950% for those due in 2034 and 5.450% for those due in 2054.

When is the expected closing date for Interstate Power and Light Company's debt offering?

The expected closing date for Interstate Power and Light Company's debt offering is September 6, 2024, subject to customary closing conditions.

How does Alliant Energy (LNT) plan to use the proceeds from this debt offering?

Alliant Energy (LNT) plans to use the proceeds to retire $500 million of 3.25% senior debentures maturing on December 1, 2024, and for general corporate purposes.