NiSource Inc. (NI) said its finance subsidiary NiSource Finance Corp. issued $500 million notes in two tranches of $250 million each. Both these tranches have unconditional guarantee from NiSource.
The offer price of the first series of notes bearing a coupon rate of 4.45% was $99.623 (per $100.00 principal), maturing on December 1, 2021. The offer price of the second series of notes bearing a coupon rate of 5.80% was $99.783 (per $100.00 principal), maturing on February 1, 2042.
NiSource intends to utilize the proceeds from the first series for pension fund contribution and utilize the proceeds from the second series to partially fund the cash tender offer of two series of its outstanding debt.
The company from time to time issues notes to meet its financial obligations. Earlier, in June 2011, the company issued $400 million senior unsecured notes yielding 5.95% interest per year, maturing on June 15, 2041. The proceeds from the issue were utilized to repay short-term bank borrowings under its revolving credit facility.
NiSource's long-term debts as of September 30, 2011, were $6.33 billion versus $5.94 billion as of December 31, 2010. The debt-to-capital ratio at the end of the third quarter 2011 was 55.9%, increasing from 54.8% at the end of 2010. The marginal increase was due to new debts issued during the second quarter.
NiSource Inc. currently retains a Zacks #3 Rank, which translates into a short-term Hold rating. The operating margin of the company lagged its peers Dominion Resources Inc. (D) and Duke Energy Corporation (DUK) in the trailing twelve months.
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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