Duke Energy Corporation
) announced that on February 1, it will redeem the entire issue
of FPC Capital I 7.10% Cumulative Quarterly Income Preferred
Securities (FPCPRA), with a face value of $300 million. The
securities were issued by a financing trust owned by its wholly
owned subsidiary Progress Energy, Inc. The $300 million worth of
FPCPRA was issued in 1999 and was originally due in 2039.
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As the securities are being redeemed at par, security holders
will receive $25 per preferred security held, plus accrued and
unpaid distributions in the amount of $0.374722 per preferred
security, payable upon presentation on the redemption date.
Based in Charlotte, North Carolina, Duke Energy is a diversified
energy company with more than $100 billion in total assets. Its
regulated utility operations serve approximately 7.1 million
electric customers located in six states in the Southeast and
Midwest. Its commercial power and international business segments
own and operate diverse power generation assets in North America
and Latin America, including a growing portfolio of renewable
energy assets in the U.S.
Earlier, the acquisition of Progress Energy in July 2012 made
Duke Energy the largest U.S. utility in terms of market
capitalization. Prior to that, Chicago-based
) was the largest U.S. utility.
Duke Energy Corporation's U.S. electricity and gas operations
generate a relatively stable and growing earnings stream. Looking
ahead, the company's outlook is supported by its strong balance
sheet and ongoing capital expansion projects, which add
visibility to the story.
However, valuation continues to be restrained by a number of
factors, including the present unfavorable macro backdrop,
predominantly fossil-fuel based generation assets, tepid demand
for electricity, foreign currency exchange volatility, pending
regulatory cases and the aftermath of Hurricane Sandy.
New Jersey, where Duke Energy has about 65% of its customers, was
hit hardest by Sandy. Other hard-hit states include Connecticut,
West Virginia, New York and Rhode Island. The biggest utilities
in the path of the storm include units of Exelon Corporation,
Consolidated Edison Inc.
Dominion Resources, Inc.
Public Service Enterprise Group Inc.
Duke Energy presently retains a short-term Zacks #3 Rank (Hold)
that corresponds with our long-term Neutral recommendation on the