Summary
Dominion Energy, Inc. (D) filed an 8-K on June 15, 2009, to report on the successful issuance and subsequent over-allotment of its 2009 Series A 8.375% Enhanced Junior Subordinated Notes. The company initially planned to sell $625 million in notes, with an option for underwriters to purchase an additional $62.5 million. By June 15, 2009, the underwriters exercised this option to purchase an additional $60 million, bringing the total principal amount of notes issued to $685 million. These notes have a long maturity, with a base maturity date of June 15, 2064, subject to extensions up to June 15, 2079. A key element of this issuance is the accompanying Replacement Capital Covenant, which restricts Dominion's ability to redeem or defease these junior subordinated notes before June 15, 2034 (with potential extensions to 2049). This restriction is tied to the company raising a specified amount of equity-like proceeds before any such redemption or defeasance. This covenant is intended to protect the equity-like characteristics of the notes and provide long-term capital stability.
Key Highlights
- 1Dominion Energy successfully issued $685 million in aggregate principal amount of 2009 Series A 8.375% Enhanced Junior Subordinated Notes.
- 2The issuance included the exercise of an over-allotment option by the underwriters, increasing the total principal amount from the initial $625 million to $685 million.
- 3The notes have a long-term maturity, with a stated maturity of June 15, 2064, and potential extensions up to June 15, 2079.
- 4A significant aspect of the issuance is the establishment of a Replacement Capital Covenant, effective until at least June 15, 2034 (extendable to 2049).
- 5The Replacement Capital Covenant imposes restrictions on the redemption or defeasance of these notes by Dominion or its subsidiaries.
- 6Redemption or defeasance is only permitted under certain conditions, primarily requiring the company to raise a specified amount of qualifying equity-like proceeds prior to such actions.
- 7The notes were registered under a Form S-3 registration statement that became effective in January 2009.