In a recent move to raise capital, Consolidated Edison (NYSE:ED) Company of New York, Inc. (CECONY), a subsidiary of Consolidated Edison, Inc., has entered into an underwriting agreement for the sale of $1.45 billion in debentures. The transaction, which took place on Thursday, involves the sale of three different series of debentures, with varying amounts and maturity dates.
The agreement, dated November 14, 2024, was made with several underwriting firms, including Barclays (LON:BARC) Capital Inc., BofA Securities, Inc., Mizuho (NYSE:MFG) Securities USA LLC, and Scotia Capital (USA) Inc. These firms will handle the sale of $350 million aggregate principal amount of CECONY’s Floating Rate Debentures, Series 2024 C due in 2027; $450 million aggregate principal amount of 5.125% Debentures, Series 2024 D due in 2035; and $650 million aggregate principal amount of 5.50% Debentures, Series 2024 E due in 2055.
The sale of these debentures is part of a registered offering under the Securities Act of 1933, following a Registration Statement on Form S-3 that became effective on August 1, 2024. The proceeds from the sale are expected to be used for general corporate purposes, which may include funding for ongoing operations and capital investment.
The debentures, which are essentially long-term debt instruments, will bear interest at specified rates and are to be repaid on their respective due dates. The floating rate for the Series 2024 C Debentures will be determined based on prevailing market rates.
In other recent news, Consolidated Edison announced a significant debt sale of $1.45 billion in three series debentures and plans to redeem $224.6 million in tax-exempt debt. The company also reported Q2 2024 earnings with an adjusted EPS of $0.59 and an operating revenue of $3.22 billion. Despite an increase in operations and maintenance expenses, Consolidated Edison has maintained its full-year 2024 EPS guidance, projecting earnings between $5.20 and $5.40.
On the analyst front, Guggenheim maintained a Neutral rating but increased the stock's price target to $99. BofA Securities raised its price target from $97.00 to $109.00, maintaining a Buy rating. A Citi analyst upgraded the stock rating from Neutral to Buy, while Jefferies initiated coverage with a Hold rating.
Subsidiary Orange and Rockland Utilities proposed new rate plans for 2025-2027, pending approval by the New York State Public Service Commission. The proposal outlines changes to electric and gas rates, potential incentives for energy efficiency, and plans for capital investments over the three-year period.
Lastly, Kirkland B. Andrews was appointed as the new CFO of Consolidated Edison.
InvestingPro Insights
Consolidated Edison's recent move to raise $1.45 billion through debentures aligns with its financial profile as revealed by InvestingPro data. The company's market capitalization stands at $33.48 billion, reflecting its substantial presence in the utility sector. With a P/E ratio of 18.07, ED's valuation appears reasonable for a utility company, especially considering its steady dividend history.
InvestingPro Tips highlight that Consolidated Edison has raised its dividend for an impressive 50 consecutive years, demonstrating a strong commitment to shareholder returns. This consistent dividend growth, coupled with a current dividend yield of 3.44%, may appeal to income-focused investors. The company's ability to maintain such a track record is particularly noteworthy given the capital-intensive nature of the utility industry and the need for ongoing investments in infrastructure.
While the company's revenue growth has been modest, with a slight decline of 1.44% in the last twelve months, its EBITDA has shown a robust growth of 16.62% over the same period. This suggests that Consolidated Edison has been effective in managing its operational costs, which is crucial as it takes on additional debt through the new debenture issuance.
Investors considering Consolidated Edison's stock might be interested to know that InvestingPro offers 7 additional tips for ED, providing a more comprehensive analysis of the company's financial health and prospects.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.