Free Writing Prospectus
Filed under Rule 433
Relating to Preliminary Prospectus dated June 15, 2016
File Nos. 333-209196 and 333-209196-01
Duke Energy Florida Project Finance, LLC
(Issuing Entity)
Pricing Term Sheet
June 15, 2016
$1,294,290,000
Series A Senior Secured Bonds
Joint Book-Running Managers: |
| RBC Capital Markets, LLC and Guggenheim Securities, LLC |
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Senior Co-Managers |
| Drexel Hamilton, LLC, Jefferies LLC, Mitsubishi UFJ Securities (USA), Inc., Samuel A. Ramirez & Company, Inc., SMBC Nikko Securities America, Inc. and The Williams Capital Group, L.P. |
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Provisional Ratings: |
| “Aaa(sf)” / “AAA(sf)” / “AAAsf” by Moody’s, S&P and Fitch, respectively(1) |
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Closing Date / Settlement Date: |
| June 22, 2016(2) |
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Interest Payment Dates: |
| March 1 and September 1 of each year, and on the final maturity date, commencing on March1, 2017 |
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Applicable Time: |
| 1:59PM (Eastern time) on June 15, 2016 |
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Proceeds: |
| The total price to the public is $1,294,238,713. The total amount of the underwriting discounts and commissions is $6,789,530. The total amount of proceeds to Duke Energy Florida Project Finance, LLC before deduction of expenses (estimated to be $9,163,470) is $1,287,449,183. |
Series A |
| Expected |
| Principal |
| Scheduled |
| Final |
| Interest |
| Initial |
| Underwriting |
| Proceeds to |
| ||
Series A 2018 |
| 2.0 |
| $ | 183,000,000 |
| March 1, 2020 |
| March 1, 2022 |
| 1.196 | % | 99.999 | % | 0.25 | % | $ | 182,540,670 |
|
Series A 2021 |
| 5.0 |
| $ | 150,000,000 |
| September 1, 2022 |
| September 1, 2024 |
| 1.731 | % | 99.998 | % | 0.40 | % | $ | 149,397,000 |
|
Series A 2026 |
| 10.0 |
| $ | 436,000,000 |
| September 1, 2029 |
| September 1, 2031 |
| 2.538 | % | 99.996 | % | 0.50 | % | $ | 433,802,560 |
|
Series A 2032 |
| 15.2 |
| $ | 250,000,000 |
| March 1, 2033 |
| March 1, 2035 |
| 2.858 | % | 99.995 | % | 0.65 | % | $ | 248,362,500 |
|
Series A 2035 |
| 18.7 |
| $ | 275,290,000 |
| September 1, 2036 |
| September 1, 2038 |
| 3.112 | % | 99.994 | % | 0.70 | % | $ | 273,346,453 |
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(1) A securities rating is not a recommendation to buy, sell or hold securities and may be subject to revision or withdrawal at any time.
(2) It is expected that the bonds will be delivered against payment for the bonds on or about June 22, 2016, which will be the fifth business day following the date of pricing of the bonds. Since trades in the secondary market generally settle in three business days, purchasers who wish to trade bonds on the date of pricing or the succeeding two business days will be required, by virtue of the fact that the bonds initially will settle in T+5, to specify alternative settlement arrangements to prevent a failed settlement.
(3) Interest on the bonds will accrue from June 22, 2016 and must be paid by the purchaser if the bonds are delivered after that date.
Series A |
| Benchmark Treasury |
| Benchmark Treasury |
| Spread to |
Series A 2018 |
| UST 0.875% due May 31, 2018 |
| 100-91/4, 0.726% |
| 47 bps |
Series A 2021 |
| UST 1.375% due May 31, 2021 |
| 101-5+, 1.131% |
| 60 bps |
Series A 2026 |
| UST 1.625% due May 15, 2026 |
| 100-5, 1.608% |
| 93 bps |
Series A 2032 |
| UST 1.625% due May 15, 2026 |
| 100-5, 1.608% |
| 125 bps |
Series A 2035 |
| UST 2.500% due February 15, 2046 |
| 101-201/4, 2.422% |
| 69 bps |
Duke Energy Florida Project Finance, LLC and Duke Energy Florida, LLC have filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) for the offering to which this communication relates. Before you invest, you should read the prospectus in that registration statement and other documents Duke Energy Florida Project Finance, LLC and Duke Energy Florida, LLC have filed with the SEC for more complete information about Duke Energy Florida Project Finance, LLC and the offering. You may get these documents for free by visiting EDGAR on the SEC web site at www.sec.gov. Alternatively, Duke Energy Florida Project Finance, LLC, any underwriter or any dealer participating in the offering will arrange to send you the prospectus if you request it by calling RBC Capital Markets, LLC toll free at 1-866-375-6829 or Guggenheim Securities, LLC collect at 1-212-918-8773.
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| Series A 2018 |
| Series A 2021 |
| Series A 2026 |
| Series A 2032 |
| Series A 2035 |
CUSIP: |
| 26444G AA1 |
| 26444G AB9 |
| 26444G AC7 |
| 26444G AD5 |
| 26444G AE3 |
ISIN: |
| US26444GAA13 |
| US26444GAB95 |
| US26444GAC78 |
| US26444GAD51 |
| US26444GAE35 |
Expected Sinking Fund Schedule
Semi-Annual Payment |
| Series A 2018 |
| Series A 2021 |
| Series A 2026 |
| Series A 2032 |
| Series A 2035 |
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Closing Date |
| $ | 183,000,000 |
| $ | 150,000,000 |
| $ | 436,000,000 |
| $ | 250,000,000 |
| $ | 275,290,000 |
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March 1, 2017 |
| 147,300,000 |
| 150,000,000 |
| 436,000,000 |
| 250,000,000 |
| 275,290,000 |
| |||||
September 1, 2017 |
| 120,300,000 |
| 150,000,000 |
| 436,000,000 |
| 250,000,000 |
| 275,290,000 |
| |||||
March 1, 2018 |
| 91,968,362 |
| 150,000,000 |
| 436,000,000 |
| 250,000,000 |
| 275,290,000 |
| |||||
September 1, 2018 |
| 66,819,301 |
| 150,000,000 |
| 436,000,000 |
| 250,000,000 |
| 275,290,000 |
| |||||
March 1, 2019 |
| 38,167,849 |
| 150,000,000 |
| 436,000,000 |
| 250,000,000 |
| 275,290,000 |
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September 1, 2019 |
| 12,697,061 |
| 150,000,000 |
| 436,000,000 |
| 250,000,000 |
| 275,290,000 |
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March 1, 2020 |
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| 133,721,958 |
| 436,000,000 |
| 250,000,000 |
| 275,290,000 |
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September 1, 2020 |
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| 107,883,912 |
| 436,000,000 |
| 250,000,000 |
| 275,290,000 |
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March 1, 2021 |
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| 78,473,209 |
| 436,000,000 |
| 250,000,000 |
| 275,290,000 |
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September 1, 2021 |
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| 52,163,338 |
| 436,000,000 |
| 250,000,000 |
| 275,290,000 |
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March 1, 2022 |
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| 22,276,781 |
| 436,000,000 |
| 250,000,000 |
| 275,290,000 |
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September 1, 2022 |
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| 431,486,993 |
| 250,000,000 |
| 275,290,000 |
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March 1, 2023 |
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| 401,419,122 |
| 250,000,000 |
| 275,290,000 |
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September 1, 2023 |
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| 374,328,724 |
| 250,000,000 |
| 275,290,000 |
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March 1, 2024 |
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| 343,548,495 |
| 250,000,000 |
| 275,290,000 |
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September 1, 2024 |
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| 315,736,958 |
| 250,000,000 |
| 275,290,000 |
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March 1, 2025 |
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| 284,226,703 |
| 250,000,000 |
| 275,290,000 |
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September 1, 2025 |
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| 255,676,143 |
| 250,000,000 |
| 275,290,000 |
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March 1, 2026 |
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| 223,417,756 |
| 250,000,000 |
| 275,290,000 |
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September 1, 2026 |
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| 194,109,843 |
| 250,000,000 |
| 275,290,000 |
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March 1, 2027 |
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| 161,084,768 |
| 250,000,000 |
| 275,290,000 |
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September 1, 2027 |
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| 131,000,718 |
| 250,000,000 |
| 275,290,000 |
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March 1, 2028 |
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| 97,189,941 |
| 250,000,000 |
| 275,290,000 |
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September 1, 2028 |
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| 66,310,505 |
| 250,000,000 |
| 275,290,000 |
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March 1, 2029 |
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| 31,694,550 |
| 250,000,000 |
| 275,290,000 |
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September 1, 2029 |
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| 250,000,000 |
| 275,290,000 |
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March 1, 2030 |
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| 214,357,231 |
| 275,290,000 |
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September 1, 2030 |
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| 181,556,335 |
| 275,290,000 |
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March 1, 2031 |
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| 144,928,619 |
| 275,290,000 |
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September 1, 2031 |
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| 111,133,282 |
| 275,290,000 |
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March 1, 2032 |
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| 73,491,827 |
| 275,290,000 |
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September 1, 2032 |
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| 38,669,301 |
| 275,290,000 |
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March 1, 2033 |
|
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| 275,290,000 |
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September 1, 2033 |
|
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| 239,255,018 |
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March 1, 2034 |
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| 199,408,169 |
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September 1, 2034 |
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| 162,192,506 |
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March 1, 2035 |
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| 121,146,581 |
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September 1, 2035 |
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| 82,613,161 |
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March 1, 2036 |
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| 40,324,274 |
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September 1, 2036 |
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Duke Energy Florida Project Finance, LLC is obligated to pay fees to the servicer of $647,145 per annum (so long as the servicer is Duke Energy Florida, LLC) payable in installments on each payment date, plus reimbursable expenses.
On the Closing Date, Duke Energy Florida, LLC will deposit $6,471,450 into the capital subaccount as a capital contribution to Duke Energy Florida Project Finance, LLC, which is equal to 0.5% of the initial principal balance of the bonds.
The Duke Energy Florida, LLC return on invested capital is $201,392 per annum.
Subject to the terms and conditions in the underwriting agreement among Duke Energy Florida Project Finance, LLC, Duke Energy Florida, LLC and the underwriters, for whom RBC Capital Markets, LLC and Guggenheim Securities, LLC are acting as representatives, Duke Energy Florida Project Finance, LLC has agreed to sell to the underwriters, and the underwriters have severally agreed to purchase, the principal amount of the bonds listed opposite each underwriter’s name below:
Underwriter |
| Series A 2018 |
| Series A 2021 |
| Series A 2026 |
| Series A 2032 |
| Series A 2035 |
| Total |
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RBC Capital Markets, LLC |
| $ | 73,200,000 |
| $ | 60,000,000 |
| $ | 174,401,000 |
| $ | 100,001,000 |
| $ | 110,117,000 |
| $ | 517,719,000 |
|
Guggenheim Securities, LLC |
| 73,200,000 |
| 60,000,000 |
| 174,401,000 |
| 100,001,000 |
| 110,117,000 |
| 517,719,000 |
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Drexel Hamilton, LLC |
| 6,100,000 |
| 5,000,000 |
| 14,533,000 |
| 8,333,000 |
| 9,176,000 |
| 43,142,000 |
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Jefferies Inc. |
| 6,100,000 |
| 5,000,000 |
| 14,533,000 |
| 8,333,000 |
| 9,176,000 |
| 43,142,000 |
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Mitsubishi UFJ Securities (USA), Inc. |
| 6,100,000 |
| 5,000,000 |
| 14,533,000 |
| 8,333,000 |
| 9,176,000 |
| 43,142,000 |
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Samuel A. Ramirez & Company, Inc. |
| 6,100,000 |
| 5,000,000 |
| 14,533,000 |
| 8,333,000 |
| 9,176,000 |
| 43,142,000 |
| ||||||
SMBC Nikko Securities America, Inc. |
| 6,100,000 |
| 5,000,000 |
| 14,533,000 |
| 8,333,000 |
| 9,176,000 |
| 43,142,000 |
| ||||||
The Williams Capital Group, L.P. |
| 6,100,000 |
| 5,000,000 |
| 14,533,000 |
| 8,333,000 |
| 9,176,000 |
| 43,142,000 |
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Total |
| $ | 183,000,000 |
| $ | 150,000,000 |
| $ | 436,000,000 |
| $ | 250,000,000 |
| $ | 275,290,000 |
| $ | 1,294,290,000 |
|
The underwriters may allow, and dealers may reallow, a discount not to exceed the percentage listed below for each tranche.
|
| Selling Concession |
| Reallowance Discount |
|
Series A 2018 |
| 0.150 | % | 0.050 | % |
Series A 2021 |
| 0.240 | % | 0.080 | % |
Series A 2026 |
| 0.300 | % | 0.100 | % |
Series A 2032 |
| 0.390 | % | 0.130 | % |
Series A 2035 |
| 0.420 | % | 0.140 | % |
The costs of issuance of the Series A Senior Secured Bonds and other initial costs of the transaction, net of underwriting discounts and commissions, are expected to be approximately $9,163,470. An aggregate of approximately $455,000 of such costs are payable to the servicer in connection with set-up costs, including costs incurred in connection with establishing the issuing entity and building the necessary information technology systems, processes and reports.
