NiSource Finance begins tender offers for 10.75% notes, 6.15% notes

By Angela McDaniels

Tacoma, Wash., Nov. 14 - NiSource Inc.'s finance subsidiary, NiSource Finance Corp., has begun tender offers for its $326,855,000 of 10.75% notes due 2016 and $545 million of 6.15% notes due 2013, according to a company news release.

NiSource Finance is offering to purchase any and all of its 10.75% notes and a limited amount of its 6.15% notes.

If less than $250 million principal amount of 10.75% notes are tendered, the company will accept an amount of 6.15% notes equal to the difference between $250 million and the principal amount of 10.75% notes tendered. If $250 million or more of 10.75% notes are tendered, the tender offer for the 6.15% notes will be terminated and no 6.15% notes will be accepted for purchase.

If 6.15% notes are accepted for purchase and the principal amount tendered exceeds the cap, NiSource Finance will accept 6.15% notes on a pro rata basis.

The total consideration for each $1,000 principal amount of notes will be set using a fixed spread over the yield to maturity of a reference Treasury security and will include an early tender payment of $30 for each note tendered by 5 p.m. ET on Nov. 22, the early participation date.

Holders will also receive accrued interest up to but excluding the settlement date.

The reference Treasury is the 1% Treasury due Oct. 31, 2016 for the 10.75% notes and the 0.625% Treasury due Feb. 28, 2013 for the 6.15% notes. The fixed spread is 125 basis points for the 10.75% notes and 80 bps for the 6.15% notes.

The offers will expire at 11:59 p.m. ET on Dec. 12.

NiSource Finance has the option to accept for payment 10.75% notes tendered by the early participation date at any time after the early participation date.

The tender offers are subject to the issuance by NiSource Finance of at least $500 million principal amount of two new series of long-term debt securities. The company plans to fund a portion of the purchase price with the proceeds of the debt securities.

The dealer manager is Citigroup at (212 723-6106 or 800 558-3745). The information agent and depositary is Global Bondholder Services Corp. (212 430-3774 for banks and brokers, others call 866 540-1500).

NiSource transmits, stores and distributes natural gas. It is based in Merrillville, Ind.

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