Bond Duval Energy Florida 1.75% ( US26444HAJ05 ) in USD

Duval Energy Florida

87.564 % ▼

United States

US26444HAJ05 ( in USD )

1.75% per year ( payment 2 times a year)

14/06/2030

Prospectus brochure of the bond Duke Energy Florida US26444HAJ05 en USD 1.75%, maturity 14/06/2030

2 000 USD

500 000 000 USD

26444HAJ0

A ( Upper medium grade - Investment-grade )

A1 ( Upper medium grade - Investment-grade )

15/12/2025 ( In 178 days )

Duke Energy Florida is a regulated electric utility serving approximately 2 million customers across a significant portion of the state of Florida.

The Bond issued by Duval Energy Florida ( United States ) , in USD, with the ISIN code US26444HAJ05, pays a coupon of 1.75% per year.
The coupons are paid 2 times per year and the Bond maturity is 14/06/2030

The Bond issued by Duval Energy Florida ( United States ) , in USD, with the ISIN code US26444HAJ05, was rated A1 ( Upper medium grade - Investment-grade ) by Moody's credit rating agency.

The Bond issued by Duval Energy Florida ( United States ) , in USD, with the ISIN code US26444HAJ05, was rated A ( Upper medium grade - Investment-grade ) by Standard & Poor's ( S&P ) credit rating agency.

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TABLE OF CONTENTS
TABLE OF CONTENTS
Table of Contents
Filed Pursuant to Rule 424(b)(5)
Registration No. 333-233896-05
CALCULATION OF REGISTRATION FEE

Proposed maximum
Proposed maximum
Title of each class of securities
Amount to be
offering price per
aggregate offering
Amount of
to be registered

registered

unit

price

registration fee(1)

First Mortgage Bonds, 1.75% Series due
2030

$500,000,000

99.863%

$499,315,000

$64,811.09

(1)
The filing fee, calculated in accordance with Rule 457(r) under the Securities Act of 1933, as amended, has been transmitted to the Securities
and Exchange Commission in connection with the securities offered by means of this prospectus supplement.
Table of Contents
Filed Pursuant to Rule 424(5)
Registration Statement No. 333-233896-05
PROSPECTUS SUPPLEMENT
(To Prospectus dated September 23, 2019)
$500,000,000 First Mortgage Bonds, 1.75% Series due 2030
Duke Energy Florida, LLC is offering $500,000,000 aggregate principal amount of First Mortgage Bonds, 1.75% Series due 2030 (the "Mortgage
Bonds"). We will pay interest on the Mortgage Bonds at a rate of 1.75% per annum, payable semi-annually in arrears on June 15 and December 15 of
each year, beginning on December 15, 2020. The Mortgage Bonds will mature as to principal on June 15, 2030. The Mortgage Bonds are secured by the
lien of our mortgage and rank equally with all of our other first mortgage bonds from time to time outstanding. The lien of our mortgage is discussed
under "Description of First Mortgage Bonds--Ranking and Security" on page 4 of the accompanying prospectus.
We may redeem the Mortgage Bonds at our option at any time and from time to time, in whole or in part, as described in this prospectus
supplement under the caption "Description of the Mortgage Bonds--Redemption--Optional Redemption." In addition, upon the occurrence of specific
events, we may redeem, at our option, the Mortgage Bonds, in whole, but not in part, as described in this prospectus supplement under the caption
"Description of the Mortgage Bonds--Redemption--Special Redemption." The Mortgage Bonds will not be entitled to the benefit of any sinking fund
or to a special redemption by operation of a sinking fund.
The Mortgage Bonds are a new issue of securities with no established trading market. We do not intend to list the Mortgage Bonds on any
securities exchange or include them in any automated quotation system. Please read the information provided under the caption "Description of the
Mortgage Bonds" in this prospectus supplement and "Description of First Mortgage Bonds" in the accompanying prospectus for a more detailed
description of the Mortgage Bonds.
Investing in the Mortgage Bonds involves risks. See "Risk Factors" on page S-5 of this prospectus supplement.
Proceeds to Duke
Energy Florida,
Price to
Underwriting
LLC Before

Public(1)

Discount(2)

Expenses

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Per Mortgage Bond

99.863%
0.650%
99.213%
Total Mortgage Bonds
$
499,315,000 $
3,250,000 $
496,065,000
(1)
Plus accrued interest from June 11, 2020, if settlement occurs after that date.
(2)
The underwriters have agreed to reimburse us for a portion of our expenses incurred by us in connection with this offering. See
"Underwriting."
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed
upon the adequacy or accuracy of this prospectus supplement or the accompanying prospectus. Any representation to the contrary is a criminal offense.
We expect the Mortgage Bonds to be ready for delivery only in book-entry form through the facilities of The Depository Trust Company for the
accounts of its participants, including Clearstream Banking, S.A. and Euroclear Bank SA/NV, on or about June 11, 2020.
Joint Book-Running Managers
Barclays

BNP PARIBAS

MUFG
Co-Managers
BNY Mellon Capital Markets, LLC

Regions Securities LLC

Santander
Junior Co-Managers
C.L. King & Associates

Drexel Hamilton

The date of this prospectus supplement is June 8, 2020.
Table of Contents
You should rely only on the information contained in or incorporated by reference in this prospectus supplement, the accompanying
prospectus and any free writing prospectus authorized by us. We have not, and the underwriters have not, authorized anyone to provide you
with information that is different. If anyone provides you with different or inconsistent information, you should not rely on it. We are not, and
the underwriters are not, making an offer to sell these securities in any jurisdiction where the offer is not permitted. You should not assume
that the information contained in or incorporated by reference in this prospectus supplement, the accompanying prospectus or any free writing
prospectus authorized by us is accurate as of any date other than the date of the document containing the information or such other date as
may be specified therein. Our business, financial condition, liquidity, results of operations and prospects may have changed since those
respective dates.
TABLE OF CONTENTS
Prospectus Supplement

Page

About This Prospectus Supplement

ii
Prospectus Supplement Summary
S-1
Risk Factors
S-5
Cautionary Statement Regarding Forward-Looking Information
S-6
Use of Proceeds
S-8
Description of the Mortgage Bonds
S-9
Certain U.S. Federal Income Tax Considerations for Non-U.S. Holders
S-14
Book-Entry System
S-17
Underwriting
S-21
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Legal Matters
S-26
Where You Can Find More Information
S-26
Prospectus

Page
References to Additional Information

i
About This Prospectus

i
Forward-Looking Statements

ii
The Company

1
Risk Factors

1
Use of Proceeds

1
Description of First Mortgage Bonds

1
Description of Debt Securities

7
Global Securities

18
Plan of Distribution

19
Experts

20
Validity of the Securities

20
Where You Can Find More Information

20
i
Table of Contents
ABOUT THIS PROSPECTUS SUPPLEMENT
This document is in two parts. The first part is this prospectus supplement, which describes the specific terms of this offering. The second part, the
accompanying prospectus, gives more general information, some of which does not apply to this offering.
If the description of this offering varies between this prospectus supplement and the accompanying prospectus, you should rely on the information
contained in or incorporated by reference in this prospectus supplement.
It is important for you to read and consider all information contained in or incorporated by reference in this prospectus supplement and the
accompanying prospectus in making your investment decision. You should also read and consider the information contained in the documents to which
we have referred you in "Where You Can Find More Information" in this prospectus supplement and the accompanying prospectus.
Unless we have indicated otherwise, or the context otherwise requires, references in this prospectus supplement and the accompanying prospectus
to "Duke Energy Florida," "the Company," "we," "us" and "our" or similar terms are to Duke Energy Florida, LLC. References in this prospectus
supplement to "First Mortgage Bonds" are to all of our first mortgage bonds issued under the Mortgage (as defined below) and from time to time
outstanding.
Notice to Prospective Investors in the European Economic Area and United Kingdom
None of this prospectus supplement, the accompanying prospectus or any related free writing prospectus is a prospectus for the purposes of the
Prospectus Regulation (as defined below). This prospectus supplement, the accompanying prospectus and any related free writing prospectus have been
prepared on the basis that any offer of the Mortgage Bonds in any Member State of the European Economic Area (the "EEA") or in the United Kingdom
(each, a "Relevant State") will only be made to a legal entity which is a qualified investor under the Prospectus Regulation ("Qualified Investors").
Accordingly, any person making or intending to make an offer in that Relevant State of Mortgage Bonds which are the subject of the offering
contemplated in this prospectus supplement, the accompanying prospectus and any related free writing prospectus may only do so with respect to
Qualified Investors. Neither Duke Energy Florida nor the underwriters have authorized, nor do they authorize, the making of any offer of Mortgage
Bonds other than to Qualified Investors. The expression "Prospectus Regulation" means Regulation (EU) 2017/1129.
Prohibition of Sales to EEA and United Kingdom Retail Investors--The Mortgage Bonds are not intended to be offered, sold or otherwise
made available to and should not be offered, sold or otherwise made available to any retail investor in the EEA or in the United Kingdom. For these
purposes, a retail investor means a person who is one (or more) of: (i) a retail client as defined in point (11) of Article 4(1) of Directive 2014/65/EU, as
amended ("MiFID II"); or (ii) a customer within the meaning of Directive (EU) 2016/97 (the "Insurance Distribution Directive"), where that customer
would not qualify as a professional client as defined in point (10) of Article 4(1) of MiFID II; or (iii) not a qualified investor as defined in the Prospectus
Regulation. Consequently no key information document required by Regulation (EU) No 1286/2014, as amended (the "PRIIPs Regulation") for offering
or selling the Mortgage Bonds or otherwise making them available to retail investors in the EEA or in the United Kingdom has been prepared and
therefore offering or selling the Mortgage Bonds or otherwise making them available to any retail investor in the EEA or in the United Kingdom may be
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unlawful under the PRIIPs Regulation.
ii
Table of Contents
Notice to Prospective Investors in the United Kingdom
The communication of this prospectus supplement, the accompanying prospectus, any related free writing prospectus, and any other document or
materials relating to the issue of the Mortgage Bonds offered hereby is not being made, and such documents and/or materials have not been approved,
by an authorized person for the purposes of section 21 of the United Kingdom's Financial Services and Markets Act 2000, as amended (the "FSMA").
Accordingly, such documents and/or materials are not being distributed to, and must not be passed on to, the general public in the United Kingdom. The
communication of such documents and/or materials as a financial promotion is only being made to those persons in the United Kingdom who have
professional experience in matters relating to investments and who fall within the definition of investment professionals (as defined in Article 19(5) of
the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "Financial Promotion Order")), or who fall within
Article 49(2)(a) to (d) of the Financial Promotion Order, or who are any other persons to whom it may otherwise lawfully be made under the Financial
Promotion Order (all such persons together being referred to as "relevant persons"). In the United Kingdom, the Mortgage Bonds offered hereby are
only available to, and any investment or investment activity to which this prospectus supplement, the accompanying prospectus and any related free
writing prospectus relates will be engaged in only with, relevant persons. Any person in the United Kingdom that is not a relevant person should not act
or rely on this prospectus supplement, the accompanying prospectus or any related free writing prospectus or any of their contents.
iii
Table of Contents
PROSPECTUS SUPPLEMENT SUMMARY
The following summary is qualified in its entirety by, and should be read together with, the more detailed information that is included elsewhere in
this prospectus supplement and the accompanying prospectus, as well as the information that is incorporated or deemed to be incorporated by
reference in this prospectus supplement and the accompanying prospectus. See "Where You Can Find More Information" in this prospectus supplement
for information about how you can obtain the information that is incorporated or deemed to be incorporated by reference in this prospectus supplement
and the accompanying prospectus. Investing in the Mortgage Bonds involves risks. See "Risk Factors" in this prospectus supplement.
Duke Energy Florida, LLC
Duke Energy Florida, LLC, a Florida limited liability company and an indirect wholly-owned subsidiary of Duke Energy Corporation, is a
regulated public utility primarily engaged in the generation, transmission, distribution and sale of electricity in portions of Florida. Duke Energy
Florida's service area covers approximately 13,000 square miles and supplies electric service to approximately 1.8 million residential, commercial and
industrial customers. As of December 31, 2019, our asset portfolio included approximately 10,259 megawatts of owned generation capacity, 46,100
miles of distribution lines and 4,897 miles of transmission lines.
The address of our principal executive offices is 299 First Avenue North, St. Petersburg, Florida 33701. Our telephone number is (704) 382-3853.
The foregoing information about Duke Energy Florida is only a general summary and is not intended to be comprehensive. For additional
information about Duke Energy Florida, you should refer to the information described under the caption "Where You Can Find More Information" in
this prospectus supplement.
S-1
Table of Contents

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The Offering
Issuer

Duke Energy Florida, LLC

Securities Offered
We are offering $500,000,000 aggregate principal amount
of the Mortgage Bonds.

Maturity Date
The Mortgage Bonds will mature on June 15, 2030.

Interest Rate
The per annum interest rate on the Mortgage Bonds will
be 1.75%.

Interest Payment Dates
Interest on the Mortgage Bonds will be payable semi-
annually in arrears on June 15 and December 15 of each
year, beginning on December 15, 2020.

Ranking
The Mortgage Bonds are a new series of First Mortgage
Bonds and will be secured by the lien of the Mortgage and
will rank equally with all our other First Mortgage Bonds
from time to time outstanding. See "Description of the
Mortgage Bonds--Ranking and Security." At March 31,
2020, we had outstanding approximately $5.98 billion in
aggregate principal amount of First Mortgage Bonds,
which will rank equally with the Mortgage Bonds.

Further Issuance
Subject to the limits contained in the Mortgage that are
described under "Description of the Mortgage Bonds--
Basis for Issuance of the Mortgage Bonds," we may, at
any time, without the consent of the holders of the
Mortgage Bonds, issue additional First Mortgage Bonds
having the same ranking, interest rate, maturity and other
terms (except for the price to the public, the issue date
and, if applicable, the initial interest accrual date and the
first interest payment date) as the Mortgage Bonds being
offered hereby; provided, however, that such additional
First Mortgage Bonds must be fungible with the
Mortgage Bonds offered hereby for U.S. federal income
tax purposes, and any such additional First Mortgage
Bonds, together with the Mortgage Bonds, will be taken
to constitute the same series of First Mortgage Bonds
under the Mortgage.

Collateral
In the opinion of our counsel, the Mortgage Bonds will be
secured by a first mortgage lien, subject only to permitted
encumbrances and liens, on substantially all of the fixed
properties owned by us, except miscellaneous properties
specifically excepted. After-acquired property is covered
by the lien of the Mortgage, subject to existing liens at the
time such property is acquired.
S-2
Table of Contents
Optional Redemption

At any time before March 15, 2030 (which is the date that
is three months prior to the maturity date of the Mortgage
Bonds (the "Par Call Date")), we will have the right to
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redeem the Mortgage Bonds, in whole or in part and from
time to time, at a redemption price equal to the greater of
(1) 100% of the principal amount of the Mortgage Bonds
being redeemed and (2) the sum of the present values of
the remaining scheduled payments of principal and
interest on the Mortgage Bonds being redeemed that
would be due if the Mortgage Bonds matured on the Par
Call Date (exclusive of interest accrued to the redemption
date), discounted to the redemption date on a semi-annual
basis (assuming a 360-day year consisting of twelve 30-
day months) at the Treasury Rate (as defined herein) plus
15 basis points, plus, in either case, accrued and unpaid
interest on the principal amount of the Mortgage Bonds
being redeemed to, but excluding, such redemption date.
At any time on or after the Par Call Date, we will have the
right to redeem the Mortgage Bonds, in whole or in part
and from time to time, at a redemption price equal to
100% of the principal amount of the Mortgage Bonds
being redeemed plus accrued and unpaid interest on the
principal amount of the Mortgage Bonds being redeemed
to, but excluding, such redemption date. See "Description
of the Mortgage Bonds--Redemption--Optional
Redemption."

Special Redemption
Upon the occurrence of certain specific events described
under "Description of the Mortgage Bonds--Redemption
--Special Redemption," we may redeem, at our option,
the Mortgage Bonds, together with all other outstanding
First Mortgage Bonds, in whole, but not in part, at the
make-whole redemption price applicable to the optional
redemption of the Mortgage Bonds as described above,
plus accrued and unpaid interest to, but excluding, the
redemption date. See "Description of the Mortgage Bonds
--Redemption--Special Redemption."

No Sinking Fund
The Mortgage Bonds will not be entitled to the benefit of
any sinking fund or to a special redemption by operation
of a sinking fund.
S-3
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Basis for Issuance of Additional First Mortgage Bonds

We will issue the Mortgage Bonds based upon the amount
of previously authenticated First Mortgage Bonds that
have been cancelled or delivered for cancellation. Under
the terms of the Mortgage, (i) as of April 30, 2020, we
could issue additional First Mortgage Bonds in amounts
up to approximately $4.4 billion based upon the bondable
value of property additions and (ii) as of April 30, 2020,
we could issue additional First Mortgage Bonds in
amounts equal to approximately $830.5 million
(approximately $330.5 million after giving effect to this
offering) based upon the amount of previously
authenticated First Mortgage Bonds that have been
cancelled or delivered for cancellation.

Use of Proceeds
The net proceeds from the sale of the Mortgage Bonds,
after deducting the underwriting discount and related
offering expenses and giving effect to the underwriters'
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reimbursement to us, will be approximately
$494.6 million. We intend to use the net proceeds from
the sale of the Mortgage Bonds to pay down a portion of
our outstanding intercompany short-term debt under our
money-pool borrowing arrangement with Duke Energy
Corporation and for general company purposes, including
to fund capital expenditures for ongoing construction and
capital maintenance. At June 1, 2020, we had
approximately $678 million of outstanding money-pool
borrowings at an annual interest rate of 0.31%.

Book-Entry
The Mortgage Bonds will be represented by one or more
global securities registered in the name of and deposited
with or on behalf of The Depository Trust Company
("DTC") or its nominee. Beneficial interests in the
Mortgage Bonds will be represented through book-entry
accounts of financial institutions acting on behalf of
beneficial owners as direct and indirect participants in
DTC. Investors may elect to hold interests in the global
securities through either DTC in the United States or
Clearstream Banking, S.A. ("Clearstream") or Euroclear
Bank SA/NV, as operator of the Euroclear System (the
"Euroclear System") in Europe if they are participants in
those systems, or indirectly through organizations which
are participants in those systems. This means that you
will not receive a certificate for your Mortgage Bonds and
Mortgage Bonds will not be registered in your name,
except under certain limited circumstances described
under the caption "Book-Entry System."

Mortgage Trustee
The Bank of New York Mellon.
S-4
Table of Contents
RISK FACTORS
You should carefully consider the risk factors, including those related to the COVID-19 pandemic, in our Annual Report on Form 10-K for the
year ended December 31, 2019 and our Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2020, as amended, each of which has
been filed with the Securities and Exchange Commission (the "SEC") and is incorporated by reference in this prospectus supplement and the
accompanying prospectus, as well as all of the other information included or incorporated by reference in this prospectus supplement and the
accompanying prospectus, before making an investment decision.
S-5
Table of Contents
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION
This prospectus supplement, the accompanying prospectus, and the information incorporated by reference herein and therein, include forward-
looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of
1934, as amended. Forward-looking statements are based on management's beliefs and assumptions and can often be identified by terms and phrases
that include "anticipate," "believe," "intend," "estimate," "expect," "continue," "should," "could," "may," "plan," "project," "predict," "will," "potential,"
"forecast," "target," "guidance," "outlook," or other similar terminology. Various factors may cause actual results to be materially different than the
suggested outcomes within forward-looking statements; accordingly, there is no assurance that such results will be realized. These factors include, but
are not limited to:
·
The impact of the COVID-19 pandemic;
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·
State and federal legislative and regulatory initiatives, including costs of compliance with existing and future environmental
requirements, including those related to climate change, as well as rulings that affect cost and investment recovery or have an impact on
rate structures or market prices;
·
The extent and timing of costs and liabilities to comply with federal and state laws, regulations and legal requirements related to coal ash
remediation, including amounts for required closure of certain ash impoundments, are uncertain and difficult to estimate;
·
The ability to recover eligible costs, including amounts associated with coal ash impoundment retirement obligations and costs related to
significant weather events, and to earn an adequate return on investment through rate case proceedings and the regulatory process;
·
The costs of decommissioning Crystal River Unit 3 and other nuclear facilities could prove to be more extensive than amounts estimated
and all costs may not be fully recoverable through the regulatory process;
·
Costs and effects of legal and administrative proceedings, settlements, investigations and claims;
·
Industrial, commercial and residential growth or decline in our service territories or customer bases resulting from sustained downturns
of the economy and the economic health of our service territories or variations in customer usage patterns, including energy efficiency
efforts and use of alternative energy sources, such as self-generation and distributed generation technologies;
·
Federal and state regulations, laws and other efforts designed to promote and expand the use of energy efficiency measures and
distributed generation technologies, such as private solar and battery storage, in our service territories could result in customers leaving
the electric distribution system, excess generation resources as well as stranded costs;
·
Advancements in technology;
·
Additional competition in electric markets and continued industry consolidation;
·
The influence of weather and other natural phenomena on our operations, including the economic, operational and other effects of severe
storms, hurricanes, droughts, earthquakes and tornadoes, including extreme weather associated with climate change;
·
The ability to successfully operate electric generating facilities and deliver electricity to customers including direct or indirect effects to
us resulting from an incident that affects the United States electric grid or generating resources;
S-6
Table of Contents
·
The impact on our facilities and business from a terrorist attack, cybersecurity threats, data security breaches, operational accidents,
information technology failures or other catastrophic events, such as fires, explosions, pandemic health events or other similar
occurrences;
·
The inherent risks associated with the operation of nuclear facilities, including environmental, health, safety, regulatory and financial
risks, including the financial stability of third-party service providers;
·
The timing and extent of changes in commodity prices and interest rates and the ability to recover such costs through the regulatory
process, where appropriate, and their impact on liquidity positions and the value of underlying assets;
·
The results of financing efforts, including the ability to obtain financing on favorable terms, which can be affected by various factors,
including credit ratings, interest rate fluctuations, compliance with debt covenants and conditions and general market and economic
conditions;
·
Our credit ratings may be different from what is expected;
·
Declines in the market prices of equity and fixed-income securities and resultant cash funding requirements for defined benefit pension
plans, other post-retirement benefit plans and nuclear decommissioning trust funds;
·
Construction and development risks associated with the completion of our capital investment projects, including risks related to
financing, obtaining and complying with terms of permits, meeting construction budgets and schedules, and satisfying operating and
environmental performance standards, as well as the ability to recover costs from customers in a timely manner, or at all;
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·
Changes in rules for regional transmission organizations, including changes in rate designs and new and evolving capacity markets, and
risks related to obligations created by the default of other participants;
·
The ability to control operation and maintenance costs;
·
The level of creditworthiness of counterparties to transactions;
·
The ability to obtain adequate insurance at acceptable costs;
·
Employee workforce factors, including the potential inability to attract and retain key personnel;
·
The effect of accounting pronouncements issued periodically by accounting standard-setting bodies;
·
The impact of United States tax legislation to our financial condition, results of operations or cash flows and our credit ratings; and
·
The ability to implement our business strategy, including enhancing existing technology systems.
Additional risks and uncertainties are identified and discussed in our reports filed with the SEC and are available at the SEC's website. In light of
these risks, uncertainties and assumptions, the events described in the forward-looking statements included or incorporated by reference in this
prospectus supplement and the accompanying prospectus might not occur or might occur to a different extent or at a different time than described.
Forward-looking statements speak only as of the date they are made and we expressly disclaim an obligation to publicly update or revise any forward-
looking statements, whether as a result of new information, future events or otherwise.
S-7
Table of Contents
USE OF PROCEEDS
The net proceeds from the sale of the Mortgage Bonds, after deducting the underwriting discount and related offering expenses and giving effect to
the underwriters' reimbursement to us, will be approximately $494.6 million. We intend to use the net proceeds from the sale of the Mortgage Bonds to
pay down a portion of our outstanding intercompany short-term debt under our money-pool borrowing arrangement with Duke Energy Corporation and
for general company purposes, including to fund capital expenditures for ongoing construction and capital maintenance. At June 1, 2020, we had
approximately $678 million of outstanding money-pool borrowings at an annual interest rate of 0.31%.
S-8
Table of Contents
DESCRIPTION OF THE MORTGAGE BONDS
We will issue the Mortgage Bonds as a new series of First Mortgage Bonds under an Indenture, dated as of January 1, 1944 (the "Original
Indenture"), with The Bank of New York Mellon, as successor trustee (the "Mortgage Trustee"). The Original Indenture is supplemented by
supplemental indentures, including by the Fifty-Seventh Supplemental Indenture to be dated as of June 1, 2020 (the "Supplemental Indenture"), which
establishes the specific terms of the Mortgage Bonds. In the following discussion, we will refer to the Original Indenture and all indentures
supplemental to the Indenture together as the "Mortgage."
Please read the following information concerning the Mortgage Bonds in conjunction with the statements under "Description of First Mortgage
Bonds" in the accompanying prospectus, which the following information supplements and, in the event of any inconsistencies, supersedes. Capitalized
terms not defined in this prospectus supplement are used as defined in the Mortgage and the Supplemental Indenture governing the Mortgage Bonds or
as otherwise provided in the accompanying prospectus.
General
We will initially offer $500 million aggregate principal amount of the Mortgage Bonds. Subject to the limits contained in the Mortgage that are
described under "--Basis for Issuance of the Mortgage Bonds," we may, at any time, without the consent of the holders of the Mortgage Bonds, issue
additional First Mortgage Bonds having the same ranking, interest rate, maturity and other terms (except for the price to the public, the issue date and, if
applicable, the initial interest accrual date and the first interest payment date) as the Mortgage Bonds being offered hereby; provided, however, that such
additional First Mortgage Bonds must be fungible with the Mortgage Bonds offered hereby for U.S. federal income tax purposes, and any such
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additional First Mortgage Bonds, together with the Mortgage Bonds, will be taken to constitute the same series of First Mortgage Bonds under the
Mortgage.
The Mortgage Bonds will be issuable in denominations of $2,000 and integral multiples of $1,000 above that amount. For more information on
DTC, see "Book-Entry System--The Depository Trust Company" below.
Basis for Issuance of the Mortgage Bonds
We will issue the Mortgage Bonds under the Mortgage based upon the amount of previously authenticated First Mortgage Bonds that have been
canceled or delivered for cancellation.
·
As of April 30, 2020, we could issue under the Mortgage, based upon the bondable value of property additions, up to approximately
$4.4 billion of additional First Mortgage Bonds; and
·
As of April 30, 2020, we could issue under the Mortgage, based upon the amount of previously authenticated First Mortgage Bonds that
have been canceled or delivered for cancellation, approximately $830.5 million of additional First Mortgage Bonds (approximately
$330.5 million after giving effect to this offering).
Maturity, Interest and Payment
The Mortgage Bonds will mature on June 15, 2030.
We will pay interest on the Mortgage Bonds at the rate of 1.75% per annum. Interest on the Mortgage Bonds will accrue from and including
June 11, 2020 or from the most recent interest payment date to which interest on the Mortgage Bonds has been paid or provided for. We will pay
interest on the Mortgage Bonds on June 15 and December 15 of each year, beginning on December 15,
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2020. We will pay interest on the Mortgage Bonds to the person(s) in whose name(s) such Mortgage Bonds are registered at the close of business on the
record date for the applicable interest payment date, which will be the close of business on (i) the business day immediately preceding such interest
payment date so long as all of the Mortgage Bonds remain in book-entry only form or (ii) the tenth calendar day immediately preceding such interest
payment date if any of the Mortgage Bonds do not remain in book-entry only form. Interest will be computed on the basis of a 360-day year comprised
of twelve 30-day months. If a due date for the payment of interest or principal falls on a day that is not a business day, then the payment will be made
on the next succeeding business day, and no interest will accrue on the amounts payable for the period from and after the original due date and until the
next business day.
Pursuant to the Mortgage, we will pay interest, to the extent enforceable under law, on any overdue installment of interest on the Mortgage Bonds
at the highest rate of interest payable on any of the First Mortgage Bonds outstanding under the Mortgage.
Ranking and Security
The Mortgage Bonds will be secured by the lien of the Mortgage and will rank equally with all our other First Mortgage Bonds from time to time
outstanding. At March 31, 2020, we had approximately $5.98 billion in aggregate principal amount of First Mortgage Bonds outstanding, which will
rank equally with the Mortgage Bonds. In the opinion of our counsel, the Mortgage constitutes a first mortgage lien, subject only to permitted
encumbrances and liens, on substantially all of the fixed properties owned by us, except miscellaneous properties specifically excepted. After-acquired
property is covered by the lien of the Mortgage, subject to existing liens at the time such property is acquired.
Dividend Restrictions
So long as any First Mortgage Bonds are outstanding, we may only pay cash dividends on our common stock, and make any other distribution to
Progress Energy, Inc., our common stockholder, out of our net income subsequent to December 31, 1943. For purposes of the Mortgage, the terms
(i) "dividend" shall be interpreted so as to include distributions and (ii) "common stock" shall be interpreted so as to include membership interests.
Redemption
In the case of any redemption as described under "--Optional Redemption" below, any notice of redemption may state that the redemption will be
conditional upon the Mortgage Trustee receiving sufficient funds to pay the principal, premium, if any, and interest on the Mortgage Bonds to be
redeemed on the date fixed for redemption and that if the Mortgage Trustee does not receive those funds, the redemption notice will not apply, and we
will not be required to redeem those Mortgage Bonds. If we elect to redeem the Mortgage Bonds as described under "--Optional Redemption," we will
notify the Mortgage Trustee of our election at least 15 days prior to the redemption date, including in the notice of redemption a reasonably detailed
computation of the redemption price, or manner of calculation if not then known.
https://www.sec.gov/Archives/edgar/data/37637/000104746920003456/a2241817z424b5.htm[6/9/2020 2:49:42 PM]

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