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NiSource (NI) Prices Maximum Tender Offer, To Cut Capital Cost
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NiSource Inc. (NI - Free Report) announced the pricing terms of its previously announced cash tender offer of up to maximum $150 million. The series of notes earmarked for the tender offer will help the company lower its capital servicing costs.
The utility will accept tender offer for purchase from 6.25% notes due 2040 followed by 5.95% notes due 2041, 5.80% notes due 2042, 5.65% notes due 2045 and lastly, 5.25% notes due 2043.
NiSource intends to fund the purchase of the accepted notes on offer with a portion of net proceeds from the sale of low interest bearing long-term debt securities in a public offering.
Refinancing of Debts
The company is fully utilizing the near-zero interest rates and issuing new debts with low interest rates. Further, it is utilizing the proceeds to partly repay the existing high-interest bearing old debts.
For this purpose, NiSource announced the pricing of $2-billion senior notes in two tranches on Aug 12. The company priced 0.950% senior notes of an aggregate principal amount worth $1.25 billion due 2025 and 1.700% senior notes worth $0.75 billion aggregate principal amount due 2031.
Interest expenses of the company at the end of first-half 2020 were $189.9 million compared with $189.7 million in the year-ago period. With the repurchase of high-interest bearing debts, interest expenses are expected to decline over the long term.
Current Debt Position
As of Jun 30, 2020, NiSource’s long-term debt amounted to $8,810.2 million, up from $7,856.2 million as of Dec 31, 2019. Also, the company does not have any significant long-term debt maturity until 2021.
Peer Moves
Other companies from the same sector are also capitalizing on this opportunity of near-zero interest rates to issue debt at cheaper rates and repay or refinance debt obligations and lower the debt servicing costs. Recently, Clearway Energy, Inc. (CWEN - Free Report) , Bloom Energy Corporation (BE - Free Report) and Linde plc (LIN - Free Report) among others opted for refinancing debts.
Zacks Rank & Price Performance
Currently, the stock carries a Zacks Rank #4 (Sell).
In the past three months, shares of the company have declined 6.9% compared with the industry’s fall of 5.6%.
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NiSource (NI) Prices Maximum Tender Offer, To Cut Capital Cost
NiSource Inc. (NI - Free Report) announced the pricing terms of its previously announced cash tender offer of up to maximum $150 million. The series of notes earmarked for the tender offer will help the company lower its capital servicing costs.
The utility will accept tender offer for purchase from 6.25% notes due 2040 followed by 5.95% notes due 2041, 5.80% notes due 2042, 5.65% notes due 2045 and lastly, 5.25% notes due 2043.
NiSource intends to fund the purchase of the accepted notes on offer with a portion of net proceeds from the sale of low interest bearing long-term debt securities in a public offering.
Refinancing of Debts
The company is fully utilizing the near-zero interest rates and issuing new debts with low interest rates. Further, it is utilizing the proceeds to partly repay the existing high-interest bearing old debts.
For this purpose, NiSource announced the pricing of $2-billion senior notes in two tranches on Aug 12. The company priced 0.950% senior notes of an aggregate principal amount worth $1.25 billion due 2025 and 1.700% senior notes worth $0.75 billion aggregate principal amount due 2031.
Interest expenses of the company at the end of first-half 2020 were $189.9 million compared with $189.7 million in the year-ago period. With the repurchase of high-interest bearing debts, interest expenses are expected to decline over the long term.
Current Debt Position
As of Jun 30, 2020, NiSource’s long-term debt amounted to $8,810.2 million, up from $7,856.2 million as of Dec 31, 2019. Also, the company does not have any significant long-term debt maturity until 2021.
Peer Moves
Other companies from the same sector are also capitalizing on this opportunity of near-zero interest rates to issue debt at cheaper rates and repay or refinance debt obligations and lower the debt servicing costs. Recently, Clearway Energy, Inc. (CWEN - Free Report) , Bloom Energy Corporation (BE - Free Report) and Linde plc (LIN - Free Report) among others opted for refinancing debts.
Zacks Rank & Price Performance
Currently, the stock carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
In the past three months, shares of the company have declined 6.9% compared with the industry’s fall of 5.6%.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through Q2 2020, while the S&P 500 gained an impressive +44.0%, five of our strategies returned +50.9%, +93.8%, +122.2%, +153.0%, and even +156.8%.
This outperformance has not just been a recent phenomenon. From 2000 – Q2 2020, while the S&P averaged +5.5% per year, our top strategies averaged up to +51.7% per year.
See their latest picks free >>