01—Abstract
Summary
Summary of the 8-K filed May 16, 2024. Cited figures are marked; the original filing is the authoritative source.
NiSource Inc. disclosed under Item 8.01 that it completed the sale of $500,000,000a aggregate principal amount of its 6.950% Fixed-to-Fixed Reset Rate Junior Subordinated Notes due 2054.
The Terms Agreement was entered into on May 13, 2024 with BofA Securities, Goldman Sachs & Co. LLC, J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC and Wells Fargo Securities, LLC as representatives of the underwriters, and the sale closed on May 16, 2024. The notes were offered under the company's Form S-3 registration statement (File No. 333-268084).
The notes accrue interest at 6.950%b per annum from May 16, 2024 until November 30, 2029, after which they reset every reset period to the Five-year U.S. Treasury Rate plus a spread of 2.451%. Interest is payable semi-annually in arrears on May 30 and November 30, beginning November 30, 2024, and the notes mature on November 30, 2054. The company may redeem some or all of the notes during specified periods and upon certain ratings or tax events, as described in the prospectus supplement dated May 13, 2024.
The notes were issued under a Subordinated Indenture dated May 16, 2024 with The Bank of New York Mellon, as trustee, as supplemented by a First Supplemental Indenture of the same date. The company intends to use the net proceeds for general corporate purposes, including financing capital expenditures, working capital and repaying existing indebtedness. The filing attaches the form of notes, the indentures, and legal opinions from McGuireWoods LLP.
02—Key points
Key Highlights
- Issued $500,000,000 aggregate principal amount of 6.950% Fixed-to-Fixed Reset Rate Junior Subordinated Notes due 2054; the sale closed on May 16, 2024.
- Notes bear a fixed 6.950% rate until November 30, 2029, then reset to the Five-year U.S. Treasury Rate plus a 2.451% spread.
- Interest is payable semi-annually on May 30 and November 30, beginning November 30, 2024.
- Notes mature on November 30, 2054, and the company may redeem them during specified periods and upon certain ratings or tax events.
- Notes are junior subordinated obligations issued under a Subordinated Indenture with The Bank of New York Mellon, as trustee.
- Proceeds are intended for general corporate purposes, including capital expenditures, working capital and repayment of existing indebtedness.
- Offering was made under the company's Form S-3 registration statement (File No. 333-268084).
03—Questions
Frequently Asked Questions
What did NiSource sell in this transaction?
NiSource sold $500,000,000 aggregate principal amount of 6.950% Fixed-to-Fixed Reset Rate Junior Subordinated Notes due 2054, with the sale closing on May 16, 2024.
What interest rate do the notes pay?
The notes pay a fixed 6.950% per annum from May 16, 2024 to November 30, 2029. From November 30, 2029, the rate resets during each reset period to the Five-year U.S. Treasury Rate plus a spread of 2.451%.
When do the notes mature and when is interest paid?
The notes mature on November 30, 2054. Interest is paid semi-annually in arrears on May 30 and November 30 of each year, beginning November 30, 2024.
Can NiSource redeem the notes early?
Yes. The company, at its option, may redeem some or all of the notes during specified periods, and upon the occurrence of certain ratings or tax events, as described in the prospectus supplement dated May 13, 2024.
How will NiSource use the proceeds?
The company intends to use the aggregate net proceeds for general corporate purposes, including to finance capital expenditures, for working capital and to repay existing indebtedness.
04—Continue