01—Abstract
Summary
Summary of the 8-K filed February 22, 2024. Cited figures are marked; the original filing is the authoritative source.
On February 22, 2024, NiSource Inc. entered into eight separate equity distribution agreements with a group of sales agents and forward purchasers to establish an at-the-market (ATM) equity offering program.
The program allows NiSource to offer and sell shares of its common stock with an aggregate gross sales price of up to $900,000,000a through December 31, 2025, from time to time, at the company's discretion. The shares are being issued under an automatic shelf registration statement filed November 1, 2022, supplemented by a prospectus supplement dated February 22, 2024. The program can be used directly through the agents or through forward sale agreements under Master Forward Sale Confirmations with affiliated forward purchasers.
Under forward sales, the company initially receives no proceeds from borrowed shares sold by a forward seller; proceeds would come only upon future physical settlement, and the company may instead elect cash or net share settlement, which could result in no proceeds or an obligation to deliver cash or shares. Agents receive commissions of up to 2%b of sales prices, and forward sellers receive commissions of up to 2% through a reduced initial forward sale price.
Per the accompanying press release, NiSource intends to use any net proceeds for general corporate purposes, including financing capital expenditures, working capital and repaying existing indebtedness. Investors should note that the company has no obligation to sell any shares, and actual sales will depend on market conditions, the trading price of the common stock and the company's funding determinations.
02—Key points
Key Highlights
- Establishment of a two-year at-the-market equity program with up to $900,000,000 aggregate gross sales price of common stock through December 31, 2025.
- Eight separate equity distribution agreements dated February 22, 2024, with Barclays, BMO, BofA Securities, Goldman Sachs, J.P. Morgan, Morgan Stanley, MUFG and Wells Fargo as sales agents, several also acting as forward sellers and purchasers.
- Shares to be issued under an automatic shelf registration statement filed November 1, 2022 (File No. 333-268084) and a prospectus supplement dated February 22, 2024.
- Agent commissions of up to 2% of the sales price of shares sold, and forward seller commissions of up to 2% via reduced initial forward sale price.
- Forward sale structure means no proceeds are received initially; proceeds depend on future physical settlement, while cash or net share settlement may yield no proceeds or create obligations to pay cash or shares.
- Stated use of proceeds includes general corporate purposes, capital expenditures, working capital and repayment of existing indebtedness.
- The company has no obligation to sell any shares; timing and amounts depend on market conditions and company funding determinations.
03—Questions
Frequently Asked Questions
How large is the new NiSource equity program and how long does it run?
The program allows NiSource to sell common stock with an aggregate gross sales price of up to $900,000,000 through December 31, 2025.
Is NiSource required to sell shares under this program?
No. The filing states the company has no obligation to offer and sell any of the shares, and actual sales will depend on market conditions, the trading price of the common stock and the company's funding determinations.
Will NiSource receive cash immediately from sales through forward sale agreements?
No. The company will not initially receive proceeds from shares sold by a forward seller. It expects to receive proceeds upon future physical settlement, but it may elect cash or net share settlement, in which case it may receive no proceeds or may owe cash or shares to the forward purchaser.
What will NiSource use the proceeds for?
According to the accompanying press release, NiSource intends to use proceeds, if any, for general corporate purposes, including financing capital expenditures, working capital and repaying existing indebtedness.
What fees are paid in connection with the offering?
Each sales agent receives a commission of up to 2% of the sales price of shares sold through it, and each forward seller receives a commission of up to 2% of the volume weighted average sales price of borrowed shares sold, paid through a reduced initial forward sale price.
04—Continue