New Issue: FTS 4.75% Straight Perpetual

Fortis Inc. has announced that it:

has today entered into an agreement with a syndicate of underwriters led by BMO Capital Markets and RBC Capital Markets under which the underwriters have agreed to purchase, on a bought deal basis, 6,000,000 Cumulative Redeemable First Preference Shares, Series J (the “Preference Shares”) for sale to the public at a price of $25.00 per Preference Share, representing aggregate gross proceeds of $150 million.

Fortis has granted the underwriters an underwriters’ option to purchase an additional 2,000,000 Preference Shares at the same offering price. Should the underwriters’ option be fully exercised, the total gross proceeds of the Preference Share offering will be $200 million.

Holders of Preference Shares will be entitled to receive a cumulative quarterly fixed dividend of 4.75% per annum, if, as and when declared by the Board of Directors of the Corporation payable (other than the first dividend payment) in equal quarterly instalments on the first day of March, June, September and December of each year. Assuming a closing date of November 13, 2012, the first dividend will be payable on March 1, 2013 in the amount of $0.35137 per Preference Share.

The Preference Shares are not redeemable prior to December 1, 2017. On or after December 1, 2017, the Corporation may, on not less than 30 nor more than 60 days’ notice, redeem the Preference Shares in whole or in part, at the Corporation’s option, by the payment in cash of $26.00 per Preference Share if redeemed prior to December 1, 2018, at $25.75 per Preference Share if redeemed on or after December 1, 2018 but prior to December 1, 2019, at $25.50 if redeemed on or after December 1, 2019 but prior to December 1, 2020, at $25.25 if redeemed on or after December 1, 2020 but prior to December 1, 2021 and at $25.00 per Preference Share if redeemed on or after December 1, 2021, in each case together with all declared and unpaid dividends up to but excluding the date fixed for redemption.

The Preference Share offering is expected to close on November 13, 2012. The Offering is subject to the receipt of all necessary regulatory and stock exchange approvals. The net proceeds from the issue will be used towards repaying borrowings under the Corporation’s $1 billion committed corporate credit facility, which borrowings were primarily incurred to support the construction of the non-regulated Waneta Expansion hydroelectric generating facility and for other general corporate purposes.

One Response to “New Issue: FTS 4.75% Straight Perpetual”

  1. […] is a Straight Perpetual, 4.75%, announced November 1. The $200-million final size of the issue indicates that the $50-million greenshoe option was […]

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