) unit, Commonwealth Edison Company (ComEd), has conducted a bond
market transaction, thereby pricing its 4.60% First Mortgage
Bonds worth $350 million. The bonds will mature on Aug 15, 2043.
The offering will close on Aug 19.
Exelon intends to utilize the net proceeds of the issue to repay
a part of its outstanding commercial paper obligations and use
the remaining for general corporate purposes.
It is a normal practice of the companies to issue new bonds
having a lower coupon rate for redeeming debts while reducing
interest costs and extending repayment tenure.
Exelon and its subsidiaries issue bonds and notes from time to
time and collect funds to repay its existing debts and for other
purposes. Exelon's unit, Baltimore Gas and Electric Company,
issued notes in Jun 2013. The company utilized the net proceeds
from the issue to repay a part of its existing notes and used the
rest for general corporate purposes.
We appreciate Exelon's steady effort towards minimization of the
debt level. The company's long-term debt as of Jun 30, 2013, was
$16.1 billion, down from $17.2 billion at the end of Dec 31,
As of Jun 30, 2013, Exelon's cash balance was $1.0 billion and
cash provided by operating activities during the first six months
of 2013 was $1.2 billion. A strong financial position enables the
company to issue debts from time to time to meet its near-term
requirements. It will also facilitate Exelon to pay an annual
interest of $16.1 million, resulting from the current bond issue.
Exelon currently has a Zacks Rank #3 (Hold). However, other
stocks in the industry that are worth considering include
Huaneng Power International, Inc.
) with a Zacks Rank #1 (Strong Buy), and
Alliant Energy Corporation
), each with a Zacks Rank #2 (Buy).
EXELON CORP (EXC): Free Stock Analysis Report
HUANENG POWER (HNP): Free Stock Analysis
IDACORP INC (IDA): Free Stock Analysis Report
ALLIANT ENGY CP (LNT): Free Stock Analysis
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