Colonial Gas seeks consents to amend five series first mortgage bonds

By Marisa Wong

Morgantown, W.Va., March 13 – Colonial Gas Co. said it has begun a consent solicitation relating to five series of its first mortgage bonds.

The company is seeking to amend its 8.8% series CH bonds due 2022, 7.38% series A-1 bonds due 2025, 6.9% series A-2 bonds due 2025, 6.94% series A-3 bonds due 2026 and 7.12% series B-1 bonds due 2028.

The company is offering a consent fee of $2.50 per $1,000 principal amount of bonds.

The consent solicitation expires at 5 p.m. ET on March 21.

The purposes of the proposed amendments are to, among other things, limit the assets covered by the lien of the notes’ indenture to the legacy assets of the issuer prior to its proposed merger with Boston Gas Co. and any repairs, renewals, or replacements to those assets; limit some other covenants in the indenture to this same scope of assets; revise some financial covenants in the indenture; and add a governing law provision to the indenture.

The issuer will request, assuming the necessary consents are obtained, authorization from the Commonwealth of Massachusetts Department of Public Utilities to complete a legal merger with Boston Gas.

If the merger is approved, Colonial Gas will merge with and into Boston Gas, and Boston Gas will be the surviving entity. The merger does not require holder consent, the company noted.

To take effect, the proposed amendments to the notes require consents from holders of at least 66 2/3% of the outstanding principal amount of the bonds. Specifically, all five series will be amended if holders of at least 66 2/3% of all the bonds deliver consents, or alternatively a series will be amended if holders of at least 66 2/3% of that series deliver consents.

The amendments will become effective only if and when the merger receives regulatory approval and is completed, the issuer noted.

The issuer is soliciting consents from holders of record as of 5 p.m. ET on March 12.

Goldman Sachs & Co. LLC (212 902-6941 or 800 828-3182) is acting as the solicitation agent, with D.F. King & Co., Inc. (212 269-5550 for banks and brokers or 800 884-5101 or email at NG@dfking.com.) as information agent and tabulation agent.

Colonial Gas, dba National Grid, is a gas distribution company based in Boston.

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