Fortis begins tender offer for up to $400 million of its 3.055% notes

By Angela McDaniels

Tacoma, Wash., April 4 – Fortis Inc. began a tender offer to purchase up to $400 million principal amount of its $1.5 billion outstanding 3.055% notes due 2026, according to a company news release.

The tender offer will expire at 11:59 p.m. ET on May 1.

Holders whose notes are tendered by 5 p.m. ET on April 17, the early tender date, and accepted for purchase will receive the total consideration, which will include an early tender premium of $30 per $1,000 principal amount.

The total consideration will be determined by reference to a fixed spread of 100 basis points over the yield based on the bid-side price of the 2.625% U.S. Treasury security due Feb. 15, 2029 calculated at 2 p.m. ET on April 17.

Fortis will pay accrued interest up to but excluding the applicable settlement date.

The company said it may elect to have early settlement of notes tendered by the early tender date. The settlement date, if necessary, for notes tendered after the early tender date but prior to the expiration date (or for notes tendered by the expiration date if Fortis does not elect to have an early settlement date) is expected to be May 3.

If holders tender more than $400 million principal amount of notes, the notes accepted for purchase will be subject to proration.

Fortis intends to accept for payment all notes tendered by the early tender date, subject to the $400 million cap, so it gave no assurance that any notes tendered after the early tender date will be accepted for purchase.

The tender offer is conditioned on the consummation of the company’s sale of its 51% interest in the Waneta Expansion Hydroelectric Project in British Columbia under an agreement with Columbia Power Corp. and Columbia Basin Trust.

The dealer manager is Goldman Sachs & Co. LLC (800 828-3182 or 212 902-6351). The information agent and tender agent is D.F. King & Co., Inc. (800 820-2415, 212 269-5550 or fortis@dfking.com).

Fortis is a regulated electric and gas utility based in St. John's, Newfoundland and Labrador.

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