Summary
Dominion Resources, Inc. (D) filed an 8-K on September 29, 2006, reporting on a significant debt financing transaction. The company entered into an underwriting agreement to issue $500 million in aggregate principal amount of its 2006 Series B Enhanced Junior Subordinated Notes Due 2066. These notes were registered under a previously effective Form S-3 registration statement. Furthermore, Dominion Resources has agreed to enter into a Replacement Capital Covenant. This covenant places restrictions on the company's ability to redeem or repurchase these Junior Subordinated Notes before September 30, 2036, unless the redemption is funded by the proceeds from the issuance of "Replacement Capital Securities" or common stock. This structure is designed to protect existing debt holders and ensure the long-term capital structure of the company.
Key Highlights
- 1Dominion Resources (D) is issuing $500 million in 2006 Series B Enhanced Junior Subordinated Notes due 2066.
- 2The issuance is being managed through an underwriting agreement with several prominent financial institutions, including Lehman Brothers and Morgan Stanley.
- 3The notes were registered under a Form S-3 registration statement, allowing for a streamlined sale process.
- 4A key component of the transaction is a Replacement Capital Covenant that restricts early redemption of these notes until September 30, 2036.
- 5The restriction on redemption is tied to the company's ability to issue "Replacement Capital Securities" or common stock.
- 6The initial beneficiaries of the Replacement Capital Covenant are the holders of Dominion Resources Capital Trust III's 8.4% Capital Securities.