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Alliant Energy’s Unit Prices Senior Notes to Refinance Debts


Alliant Energy Corporation LNT has declared that its subsidiary, Alliant Energy Finance announced the pricing of $700 million senior unsecured notes. The notes were issued in two tranches — $400 million of 3.750% Senior Notes due 2023 and $300 million of 4.250% due 2028.

The company intends to utilize the net proceeds of the notes issued to retire Alliant Energy Finance’s variable-rate term loan credit agreements expiring in 2018, to reduce the company's outstanding commercial paper and for general corporate purposes.

Debt Levels Lower Than the Industry

Alliant Energy’s debt-to-capitalization ratio currently stands at 47.79%, lower than its industry’s average of 48.22%. The company is trying to manage its debt level efficiently, allowing it to lower interest burden and thereby result in a positive impact on the margins.

Its interest coverage ratio — which underscores how easily a company can pay interest on its outstanding debt — is 5.68, better than the industry average of 4.01. Given its operational efficiency, the company can carry out debt servicing uninterruptedly.

Long-Term Plans of Alliant Energy

Alliant Energy has plans to invest nearly $5.4 billion during the 2018-2021 time frame. Post 2021, within the 2022-2026 time frame, the company plans to invest nearly $5 billion to strengthen its electric and natural gas distribution, and generation portfolio, along with their operations. The investments will primary focus on generating more production from the renewable assets.

To complete these capital projects on time and within budget, the company will have to issue new debts to fund these capital projects. Meanwhile, the rising interest rates are a concern. However, the strong state economies in its service areas, constructive regulatory environment and nearly 99% of the earnings generated from the regulated operations provide ample visibility and stability to the company, thereby ensuring its financial flexibility.

Price Movement

Alliant Energy has gained 1.2% in the past three months against its industry’s decline of 2.7%.

Zacks Rank & Other Key Picks

Alliant Energy currently has a Zacks Rank #2 (Buy). Other top-ranked stocks in the same space are NRG Energy Inc. NRG, TerraForm Power, Inc. TERP, both sporting a Zacks Rank #1 (Strong Buy) and Ameren Corporation AEE, carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

NRG Energy delivered an average positive earnings surprise of 507.93% in the last four quarters. The Zacks Consensus Estimate for 2018 has moved up 10.4% to $3.29 per share in the past 90 days.

TerraForm Power delivered an average positive earnings surprise of 114.71% in the trailing four quarters. In the past 60 days, the Zacks Consensus Estimate for 2018 earnings has moved up to 21 cents from a loss of 55 cents.

Ameren Corporation delivered an average positive earnings surprise of 7.69% in the last four quarters. The Zacks Consensus Estimate for 2018 has moved up 0.7% to $3.04 per share in the past 60 days.

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