NiSource announces tender offer response, lifts second priority cap

New York, May 19 – NiSource Inc. announced the early tender results in the offer by its finance subsidiary NiSource Finance Corp. for up to $750 million of four series of notes. The company also raised the cap on the second priority tier.

NiSource will now purchase up to $323,973,000 of the second priority notes, increased from $300 million, according to a news release.

As a result, no fourth priority notes will be purchased.

The tender offer and the early tender results are as follows:

• The $450 million of 5.25% notes due 2017 have first priority. By the early tender date, $239,579,000 had been submitted for purchase. Since this is below the cap for this priority level of $275 million, all will be purchased.

Pricing is $1,097.50 per $1,000 principal amount, set using a spread of 25 basis points over the 1% Treasury due Sept. 15, 2017;

• The $800 million of 6.4% notes due 2018 have second priority. By the early tender date, $538.27 million had been submitted for purchase. NiSource will buy $323,973,000, the new cap level.

Pricing is $1,143.55 per $1,000 principal amount, set using a spread of 30 bps over the 1% Treasury due March 15, 2018;

• The $250 million of 4.45% notes due 2021 have third priority. By the early tender date, $186,448,000 had been submitted for purchase. There is no cap for this priority level and all will be purchased.

Pricing is $1,116.89 per $1,000 principal amount, set using a spread of 90 bps over the 1.375% Treasury due April 30, 2020;

• The $250 million of 3.85% notes due 2023 have fourth priority. By the early tender date, $195,463,000 had been submitted for purchase. Since notes with higher priority have already been tendered up to the overall cap of $750 million, no notes will be accepted from this tier.

Settlement for notes tendered by the early deadline was scheduled for May 19.

The tender ends at 11:59 p.m. ET on June 2, but because the offer is fully subscribed no further notes will be accepted, NiSource said.

The company released pricing on May 18 and began the offer on May 5.

As previously announced, the early tender deadline was 5 p.m. ET on May 18.

The amount to be paid for the notes includes an early tender premium of $30.00 per $1,000 principal amount for notes tendered by the early deadline.

NiSource will also pay accrued interest up to but excluding the settlement date.

The offer was subject to conditions including the payment of a special dividend to NiSource by its Columbia Pipeline Group, Inc. business. Columbia Pipeline is expected to separate from NiSource and become a stand-alone publicly traded company.

Goldman Sachs & Co. (800 828-3182 or 212 902-6941) and Morgan Stanley & Co. LLC (800 624-1808 or 212 761-1057) are the dealer managers. Global Bondholder Services Corp. (banks and brokers call 212 430-3774, others 866 470-4500) is the tender and information agent.

NiSource is a Merrillville, Ind., company with businesses in natural gas transmission, storage and distribution, and electricity generation, transmission and distribution.

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