Progress Energy, a utility serving the Southeastern U.S., is planning to enter interest-rate swaps to alter the profile of its USD11 billion debt portfolio, said Greg Beuris, director of financial operations in Raleigh, N.C. He said Progress Energy, the holding company for Carolina Power & Light and Florida Power and a member of the Standard & Poor's 500 Index, seeks to maintain 70% of its debt in fixed-rate and 30% in floating-rate, and is looking to enter swaps whereby it receives floating. "We had in excess of USD1 billion of swaps on earlier in the year, but we took some off and are now looking to get back in," Beuris said. He noted it unwound the swaps because a shift in the forward curve generated a profit.
Beuris said Progress, which manages the debt of CP&L and Florida Power as one combined entity, has decided to leave as fixed rate CP&L's recent USD500 million 10-year notes issue, and will instead look to enter shorter-dated swaps based on other liabilities. "That was a 10-year and we currently don't like to do anything longer than five," he said. Beuris declined to reveal the company's current fixed-to-floating split or quantify how much in swaps the company will look to enter. He said the company would enter swaps with its relationship banks, declining further comment.
Moody's Investors Service rates Progress Baa1 and S&P has it at BBB.
