Adding a surge of power to the private placement market, Consolidated Edison Inc. (Con Ed) is prepping a $340 million leased-backed deal. Merrill Lynch & Co. is lead agent on the transaction.
The deal is expected to spark the interest of many investors, said a source familiar with the transaction.
"It's a big deal, so it's going to generate a lot of attention in the market," the source said. "A lot of private placement investors like it a lot and are very comfortable with the synthetic lease structure. It will go well because the credit is very well-liked."
The senior secured notes, which are secured by a power plant in New Hampshire that is being built by Con Ed, will have a 22-year final maturity with a 22-year average life. The proceeds from the transaction will be used to help build the plant.
"I think there is a very large amount of demand for long paper now, especially for higher quality credits," said the source.
Although Con Ed currently has a rating of A1 from Moody's Investors Service and an A-plus rating from Standard & Poor's Ratings Service, the upcoming transaction has not yet been rated.
Presently, Con Ed is in the midst of a merger with Conn.-based Northeast Utilities, which has placed the company's present ratings on watch.
Consolidated Edison Inc. through its subsidiaries, provides a variety of energy-related products and services. The company supplies electric service in New York City and most of Westchester County, N.Y. Con Ed also provides natural gas in Manhattan, the Bronx, parts of Queens, and most of Westchester County, as well as provide steam service in most of Manhattan.