Fortis completes placement of $500 million notes to U.S. investors

By Lisa Kerner

Charlotte, N.C., Sept. 15 – Fortis Inc. issued $287 million of senior notes to U.S.-based institutional investors in the second tranche of a private placement first announced in March.

Proceeds will be used to refinance existing debt, including $150 million of 5.74% senior unsecured notes due Oct. 30 and the C$125 million of 5.56% unsecured debentures due Sept. 15, 2014 of a subsidiary.

Remaining proceeds from Monday’s issue will be used to pay other outstanding corporate debt, according to a company news release.

Fortis issued $213 million of notes under the same May 8 purchase agreement on June 30 for total gross proceeds of $500 million for the offering. The June proceeds were used to refinance debt, including repayment of U.S.-dollar drawings on a committed credit facility, and for general corporate purposes.

The issued notes have terms of between five and 30 years, with a weighted average term to maturity of 11 years. Coupon rates range from 2.92% to 5.03%, with a weighted average rate of 3.85%.

Wells Fargo Securities, LLC and Morgan Stanley & Co. LLC acted as joint placement agents for the sale.

The notes were not registered under the Securities Act of 1933 as amended, nor will they be registered under any state securities laws.

Fortis is a St. John's, Newfoundland-based investor-owned gas and electric distributor.

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