Exelon Corporation
(
EXC
) announced that its subsidiary Exelon Generation Company, LLC will
sell $775 million of senior notes in two tranches. The company
expects to close the sale of notes by June 18, 2012, and utilize
the proceeds for general corporate purposes.
The first series consists of $275 million senior notes yielding
4.25% interest per year and maturing on June 15, 2022, while the
second series consists of $500 million senior notes yielding 5.60%
interest per year and maturing on June 15, 2042.
In 2012, Exelon has plans to issue new debts worth $1,325
million and retire debts worth $1,075 million. The $775 million
issue is part of that plan and will in turn increase the long-term
debt of the company. Outstanding long-term debt was $17.4 billion
as of March 31, 2012.
Ameren Corporation
(
AEE
), an Exelon peer, had long-term debt of $6.7 billion as of March
31, 2012, marginally down from $6.9 billion at the end of the first
quarter 2011.
The long-term debt-to-equity ratio of Exelon at the end of the
first quarter 2012 was 44.5%. The ratio will increase to 45.5% with
the issue of new debts.
Interest expenses in the first quarter 2012 rose by $14 million
year over year to $195 million mainly due to higher debt levels.
With the issue of new debts, interest expenses will rise further in
the coming quarters.
Exelon nevertheless boasts of a strong financial position. The
company exited the first quarter of 2012 with cash and cash
equivalents of $831 million. Cash provided by operating activities
in the first quarter totaled $977 million. The financial strength
will allow Exelon to easily meet the enhanced interest burden.
Exelon's first quarter earnings of 85 cents per share were ahead
of our estimate. The company expects earnings per share in 2012 in
the range of $2.55 to $2.85, with Exelon Generation contributing
strongly in the range of $1.75 to $1.95 per share.
The Zacks Consensus Estimates for second-quarter 2012 and fiscal
2012 are currently at 68 cents per share and $2.89 per share,
respectively.
Exelon Corporation retains a Zacks #3 Rank (short-term Hold
rating). We maintain a longer-term Neutral recommendation on
Exelon.
Based in Chicago, Illinois, Exelon Corporation, a utility
services holding company, engages in the generation, transmission,
distribution and sale of electricity to residential, commercial,
industrial and wholesale customers.
AMEREN CORP (AEE): Free Stock Analysis Report
EXELON CORP (EXC): Free Stock Analysis Report
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