NiSource Inc. (NI) announced that its subsidiary NiSource Finance Corp. has sold $400 million worth of notes yielding 5.95% interest per year and maturing on June 15, 2041. The notes were offered at $99.693 (per $100.00 principal).
NiSource’s unit will use the proceeds to repay short-term bank borrowings under its revolving credit facility.
NiSource’s long-term debts as of March 31, 2011, were $5.92 billion versus $5.93 billion as of December 31, 2010. The debt-to-capital ratio at the end of the first quarter 2011 was 54.2%, improving marginally from 54.7% at the end of 2010. However, with the issuance of $400 million notes the debt-to-capital ratio of the company will increase to 55.8%.
Interest expenses in the first quarter 2011 declined 9.9% year over year mainly due to lower debt levels compared to the previous year quarter. However, with the new debts issued the interest expenses of the company will go up in the coming quarters.
During the first quarter earnings call, NiSource reaffirmed its 2011 earnings guidance of $1.25 to $1.35 per share and expects to deliver 3% to 5% annual earnings growth over the long term backed by its balanced business strategy and investment opportunities.
The Zacks Consensus Estimates for second-quarter 2011, fiscal year 2011 and fiscal year 2012 are 13 cents per share, $1.33 per share and $1.44 per share, respectively.
NiSource Inc. currently retains a Zacks #3 Rank (short-term Hold rating). The company competes with Dominion Resources Inc. (D) and Duke Energy Corporation (DUK).
Merrillville, Indiana based NiSource is an energy holding company whose subsidiaries provide natural gas, electricity and other products and services in the U.S. Its operating subsidiaries deliver energy to customers within the high-demand energy corridor stretching from the Gulf Coast through the Midwest to New England.
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