Salomon Smith Barney,Bank of America,J.P. Morgan and First Union co-led and launched two separate deals last week for FPL Group Capital and its subsidiary Florida Power & Light. The Salomon and B of A deal for FPL Group Capital is $2 billion. J.P. Morgan and First Union's deal for the subsidiary is $1 billion, according to a market source. Each is divided into 364-day and three-year pieces, she said. Pricing on the $2 billion loan is LIBOR plus 25 basis points with a step-up by 10 basis points each time if 33% and 66% of the loan is drawn, she explained. Commitment fees are 8 to 12.5 basis points and the facility fees are 8 basis points on the 364-day and 10 basis points on the three-year lines.
The Florida, Power & Light deal is priced at LIBOR plus 20 basis points with a step up to 30 and 40 basis points if 33% and 66% is drawn. The facility fees are 7 and 9 basis points for the 364-day and three-year lines, respectively. The company is rolling up a series of bilateral lines and then expanding the bank group, said the banker. Pricing is slim, as the company is AA- investment grade, but this should not matter, as there are lots of projects FPL and the subsidiaries are planning, so banks coming in are looking for the ancillary business, said another banker following the deal. Commitments are due Sept. 19 and the deals are expected to close at the end of this month. Calls to Robert McGrath, treasurer of FPL were referred to Pat Davis, a spokeswoman for FPL who declined to comment on financing arrangements. Officials at the banks involved either declined comment or did not return calls.