8-KFinancial Events

EVERSOURCE ENERGY 8-K Report, Financial Obligation (Jun 10, 2008)

Filed June 10, 2008For Securities:ES

Summary

Eversource Energy, then operating as Northeast Utilities (NU), filed this Form 8-K on June 10, 2008, to report the issuance of $250 million in Senior Notes, Series C, due 2013. These notes carry a fixed interest rate of 5.65% and are senior unsecured obligations of the company. The issuance was conducted under an Underwriting Agreement with Lehman Brothers Inc. and JP Morgan Securities Inc. acting as representatives for the underwriters. This filing is primarily informational, detailing a routine financing activity. Investors should note that this debt issuance increases the company's leverage and future interest expense. The ability to redeem the notes at a 'make-whole' price suggests flexibility for NU in managing its debt structure should market conditions or its financial strategy warrant early repayment. The specifics of the indenture and underwriting agreement are provided as exhibits for further due diligence.

Key Highlights

  • 1Northeast Utilities (NU) issued $250 million in Senior Notes, Series C, due June 1, 2013.
  • 2The notes have a fixed annual interest rate of 5.65%.
  • 3Interest payments are semi-annual, due on June 1 and December 1, starting December 1, 2008.
  • 4The notes are senior unsecured obligations of Northeast Utilities.
  • 5The issuance was facilitated by an Underwriting Agreement with Lehman Brothers Inc. and JP Morgan Securities Inc.
  • 6The notes may be redeemed by NU at a 'make-whole' price prior to maturity.
  • 7The filing details the Third Supplemental Indenture governing the notes.

Frequently Asked Questions

The primary purpose of this 8-K filing is to report the creation of a material direct financial obligation by Northeast Utilities (NU). Specifically, it announces the issuance of $250 million in Senior Notes, Series C, due 2013.

The Senior Notes, Series C, due 2013, have an aggregate principal amount of $250 million, bear interest at a fixed rate of 5.65% per annum, and mature on June 1, 2013. Interest payments are made semi-annually, on June 1 and December 1.

'Senior unsecured obligations' means that these notes rank equally with other senior debt of Northeast Utilities but are not backed by any specific collateral. In the event of bankruptcy or liquidation, holders of these notes would have a claim on the company's assets after secured creditors, but before equity holders.

Yes, the notes can be redeemed, in whole or in part, at NU's option. The redemption price would be a 'make-whole' price, which typically means the present value of the remaining interest payments plus the principal, discounted at a specified rate. This allows NU to refinance or retire this debt if beneficial.