TCA Issues 30-Year Notes at 6.10%

According to DBRS:

DBRS has today assigned a rating of “A” with a Stable trend to TransCanada PipeLines Limited’s (the Company) $500 million of 3.40% and $750 million of 6.10% senior unsecured notes (the Notes), maturing June 1, 2015 and June 1, 2040, respectively. The Notes are being issued under the Company’s pricing supplement dated May 26, 2010, and are expected to settle on June 1, 2010.

These Notes will rank equally with the Company’s existing and future senior unsecured debt, and the net proceeds from the offering will be used to partially fund capital projects, retire maturing debt obligations and for general corporate purposes.

TCA.PR.X closed today at 46.50-69 to yield 6.06-03%, while TCA.PR.Y closed at 46.01-30 to yield 6.13-08%. Taking 6.07% as a happy medium and converting to interest-equivalent with a 1.4x factor makes the preferreds yield 8.50% interest-equivalent, for a seniority spread for this issuer of 240bp – much less than the seniority spread on the PerpetualDiscount as a whole because – and this part is interpretation! – the preferreds have scarcity value as non-financial issues.

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