Public Service Co of Colorado issues $1B in mortgage bonds

Published 20/03/2025, 17:30
Public Service Co of Colorado issues $1B in mortgage bonds

Public Service Company of Colorado, a subsidiary of Xcel Energy Inc. (NASDAQ:XEL), has announced the issuance of $1 billion in aggregate principal amount of first mortgage bonds. The offering, finalized on Thursday, consists of two series: $400 million of 5.35% bonds due in 2034, and $600 million of 5.85% bonds maturing in 2055. According to InvestingPro data, Xcel Energy currently maintains a total debt of $30.27 billion, with this new issuance representing part of its broader capital structure strategy. The company’s stable financial profile is reflected in its low beta of 0.39, indicating lower price volatility compared to the broader market.

This move comes as part of the company’s strategy to manage its capital structure and fund its ongoing operations. The 2034 bonds are an addition to an existing series initially issued on April 4, 2024, bringing the total for that series to $850 million. The newly issued 2055 bonds represent a new series under the company’s indenture. With a market capitalization of $40.33 billion and a current ratio of 0.67, InvestingPro analysis indicates that the company’s short-term obligations exceed its liquid assets, making this bond issuance particularly strategic for its financial planning.

The bonds were offered under an existing shelf registration statement and sold through an underwriting syndicate led by Citigroup (NYSE:C) Global Markets Inc., Morgan Stanley (NYSE:MS) & Co. LLC, J.P. Morgan Securities LLC, and U.S. Bancorp (BVMF:USBC34) Investments, Inc.

The indenture governing the bonds, dated October 1, 1993, has been supplemented by two additional indentures related to the respective series of bonds. These documents outline the terms and conditions under which the bonds are issued and provide legal protection for bondholders.

The proceeds from the bond issuance are expected to be used for general corporate purposes, which may include the repayment of existing debt, investment in infrastructure, and other capital expenditures.

The company’s decision to issue these bonds reflects its assessment of the market conditions and its capital needs. By locking in fixed interest rates for the long term, Public Service Company of Colorado is aiming to secure favorable financing to support its future growth and stability.

This financial move is disclosed in a filing with the Securities and Exchange Commission, ensuring transparency and compliance with regulatory requirements. Investors and stakeholders are advised to review the company’s filings for detailed information about the terms of the bonds and the conditions of the offering.

In other recent news, Xcel Energy Inc. reported mixed fourth-quarter results, with earnings falling short of analyst expectations. The company posted adjusted earnings per share of $0.81, missing the consensus estimate of $0.89, and reported revenue of $3.12 billion, which was below the expected $3.77 billion. Despite these results, Xcel Energy reaffirmed its 2025 earnings guidance, projecting an EPS range of $3.75 to $3.85, aligning closely with analyst projections.

The company also announced a dividend increase to 57 cents per share, marking a 4.1% rise and continuing a two-decade streak of annual growth in shareholder returns. Additionally, Xcel Energy received approval from the Minnesota Public Utilities Commission for its comprehensive resource plan, which includes significant expansions in renewable energy and storage capacity. The plan outlines the construction of a 420 MW combustion turbine and a 300 MW battery energy storage system, along with life extensions for existing nuclear and fuel plants.

In leadership changes, Xcel Energy announced the retirement of Chief Operations Officer Timothy O’Connor and the appointment of Scott Sharp (OTC:SHCAY) and Michael Lamb to executive roles. These appointments are part of the company’s succession planning and strategic oversight efforts. The developments reflect Xcel Energy’s ongoing commitment to operational excellence, financial stability, and sustainable energy solutions.

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