Constellation Energy files to sell $2.3 billion in debt

Advantage sought in today's low rates

January 26, 2002|By Dan Thanh Dang | Dan Thanh Dang,SUN STAFF

Constellation Energy Group Inc. filed with regulators yesterday to sell $2.3 billion in debt securities over the next two years.

According to its shelf registration filing with the Securities and Exchange Commission, Constellation - the parent company of Baltimore Gas and Electric Co. - can sell the securities from time to time in one or more offerings up to a total of $2.5 billion.

Constellation is also carrying forward $200 million in previously registered notes, according to the filing.

The proceeds from the sale will be used for general corporate purposes related to Constellation's nonregulated businesses, repayment of commercial paper borrowings and refinancing short-term obligations, which totaled $955 million on Dec. 31, the filing said.

The proposed sale will be determined by market conditions.

"We're taking our existing short-term debt and terming it out into long-term debt," said Constellation spokeswoman Nancy H. Caplan. "It's smart capital management because the interest rates are low right now."

Caplan said Constellation arranged short-term financing in June to facilitate its plan to separate into two independent, publicly traded businesses. When the company abandoned the plan in October, that short-term debt needed to be refinanced, she said.

Hurt by the weak economy, a series of earnings miscalculations and a failed business plan, Constellation's stock price has plunged almost 50 percent from its May high of $50.14.

Constellation is scheduled to release earnings next week and to unveil its future strategy during an analysts' conference in New York.

Constellation's stock price rose 8 cents yesterday on the New York Stock Exchange to close at $27.18.

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