Baltimore Gas and Electric Company ("BGE"), an operational unit
), is set to offer 10-year notes worth $250 million due on August
15, 2022. The senior notes are expected to yield 2.8% interest per
year and the offer is slated to close on August 17, 2012.
Exelon's unit will use the proceeds from this sale to finance
its debt obligations especially the ones which are short-term and
for corporate purposes.
Exelon and its subsidiaries issues notes from time to time and
accumulate funds for expansion projects or to repay debts. On June
18, 2012, the company's subsidiary, Exelon Generation Company,
priced a total $775 million of senior notes in two tranches.
The first series consisted of $275 million senior notes yielding
4.25% interest per year and maturing on June 15, 2022, while the
second series comprised $500 million senior notes yielding 5.60%
interest per year and maturing on June 15, 2042. The net proceeds
from the issue were used for general corporate purposes.
The long-term debt as of June 30, 2012 was $18.1 billion, up
considerably from $12.2 billion at year-end 2011. Interest expenses
in second quarter 2012 were $261 million, and we believe interest
expenses will escalate with this fresh offering of senior notes.
Despite a higher debt level, the debt-to-capital ratio at the end
of the second quarter of 2012 was 46.7% versus 48.2% at year-end
2011, due to issue of equities in the first half of 2012. However,
with the issuance of notes, the debt-to-capital ratio is expected
to increase marginally to 47.1%.
Exelon Corporation retained its full-year earnings guidance range
of $2.55 to $2.85 per share and pegged operating earnings in the
range of 65 cents to 75 cents per share for the third quarter of
2012. The company expects cash from operations in 2012 to be $5.37
billion and also forecasts the issue of new debts of $1.75 billion
during 2012. It expects to shed $1.07 billion of debt during the
The Zacks Consensus Estimates for the third quarter and full-year
2012 are currently pegged at 73 cents per share and $2.75 per
Exelon's closest peer
) also recently announced the sale of senior notes worth $400
million with interest rate of 2.7% due in 2022. The company plans
to utilize the net proceeds of this offering along with other
surplus cash primarily to redeem its outstanding 9.75% and 6.25%
senior secured notes worth $450 million due in 2018 and also $51.1
million 5.50% senior notes due in 2014.
Like Ameren, Exelon currently maintains a Zacks #3 Rank, implying a
short-term Hold rating.
Based in Chicago, Illinois, the company engages in the generation
of electricity in the United States. It generates electricity from
nuclear, fossil, hydro and renewable energy sources.
AMEREN CORP (AEE): Free Stock Analysis Report
EXELON CORP (EXC): Free Stock Analysis Report
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