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Derivatives

PNM Executes Treasury Lock

Energy producerPNM Resources entered a Treasury lock to hedge interest rate risk before its principal subsidiary, Public Service Company of New Mexico, issued USD300 million in bonds on Sept. 10. Kirk Meyer, treasurer at PNM Resources in Albuquerque, N.M., said it executed the Treasury lock approximately a fortnight before the bond sale because it was happy with the rates. He declined to elaborate.

The five-year bonds pay a coupon of 4.4%. For the lock, PNM worked with the lead managers of the bond sale, Banc of America Securities, Citigroup Global Markets and JPMorgan, said Meyer, saying that counterparties are selected from the corporate's relationship banks.

Public Service Company of New Mexico provides electric power and natural gas utility services to more than 1.3 million people in New Mexico. The company also sells power on the wholesale market.

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