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Berkshire Hathaway Energy returns to fund Dominion Energy debt

Berkshire Hathaway Energy Co is in the US high-grade primary Monday with a three-part deal to help fund debt assumed from its acquisition of Dominion Energy.

By William Hoffman

NEW YORK , October 27 - Berkshire Hathaway Energy Co is in the US high-grade primary Monday with a three-part deal to help fund debt assumed from its acquisition of Dominion Energy.

The energy company, a subsidiary of celebrity investor Warren Buffet's Berkshire Hathaway, announced the M&A deal back in July for a total enterprise value of US$9.7bn, which includes US$5.7bn of Dominion Energy's outstanding debt.  

The funds from Tuesday's debt raise are slated to repay a portion of Dominion energy's outstanding debt, of which US$1.2bn is maturing this year and next, according to Refinitiv data. 

Remaining proceeds will be used to fund commitments under certain tax equity investments in third party sponsored renewable energy projects, according to the filing. 

Berkshire Hathaway Energy is offering a three-part deal that contains five, 10 and 30-year senior notes at initial price thoughts in the area of Treasuries plus 65bp, 115bp and 150bp, respectively. 

The company last priced a US$2bn two-part bond back in March shortly after the Federal Reserve stepped in to backstop bond markets.

At the time, Berkshire Hathaway Energy priced a US$1.1bn 10-year and a US$900m 30-year each at 285bp over Treasuries, but those 3.7% 2030s and 4.25% 2050s have since rallied massively to a G spread of 96.6bp and 130bp over, respectively.

Bookrunners Barclays, Citigroup, JP Morgan and Wells Fargo seek to price the new notes close to those outstanding levels later today.  

(Reporting by William Hoffman; Editing by Paul Kilby)

((william.hoffman@refinitiv.com))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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