NiSource Announces Cash Tender Offer for Debt Securities

Dec 01, 2010, 09:20 ET from NiSource Inc.

MERRILLVILLE, Ind., Dec. 1, 2010 /PRNewswire-FirstCall/ -- NiSource Inc. (NYSE: NI) announced today that its finance subsidiary, NiSource Finance Corp., commenced a cash tender offer for up to $250 million aggregate principal amount of its outstanding 10.75% Notes due 2016 ("2016 Notes") and 6.80% Notes due 2019 ("2019 Notes").  All validly tendered 2016 Notes will be accepted for purchase before any 2019 Notes are accepted.  There are currently outstanding $600 million aggregate principal amount of 2016 Notes and $500 million aggregate principal amount of 2019 Notes.  If the aggregate principal amount of notes tendered exceeds $250 million, NiSource Finance will accept notes of the series last accepted for purchase on a pro rata basis.  

The tender offer is made pursuant to an Offer to Purchase and related Letter of Transmittal dated today, which set forth a comprehensive description of the terms of the offer.  NiSource Finance intends to fund a portion of the purchase price of the notes accepted in the offer with the net proceeds from the sale of a new series of long-term debt securities in a public offering announced separately today.

The offer is scheduled to expire at 11:59 p.m., New York City time, on December 29, 2010.  Holders must tender and not withdraw their notes before 5:00 p.m., New York City time, on December 14, 2010, to receive the total consideration, which includes an early tender payment of $30 per $1,000 principal amount of notes accepted for purchase.  Holders who validly tender their notes after 5:00 p.m., New York City time, on December 14, 2010, but before the offer expires, will receive the late tender offer consideration, which is the total consideration minus $30 per $1,000 principal amount of notes tendered and accepted for purchase.

Tenders of notes may be validly withdrawn at any time up to 5:00 p.m., New York City time, on December 14, 2010.

The total consideration for each $1,000 principal amount of notes validly tendered and accepted for payment pursuant to the tender offer will be determined in the manner described in the Offer to Purchase by reference to the fixed spread over the yield to maturity of the applicable U.S. Treasury Security specified for each series of notes on the cover page of the Offer to Purchase, as calculated by the Dealer Managers at 2:00 p.m., New York City time, on December 14, 2010, as shown in the following table.

CUSIP Number

Title of Security

Principal Amount Outstanding

Acceptance Priority

Reference

U.S. Treasury Security

Bloomberg Reference Page(1)

Fixed Spread

(Basis Points)

Early Tender Payment(2)

65473QAU7

10.75% Notes due 2016

$600,000,000

1

1.375% U.S. Treasury Note due 11/30/15

PX6

190

$30

65473QAT0

6.80% Notes due 2019

$500,000,000

2

2.625% U.S. Treasury Note due 11/15/20

PX7

145

$30

(1) The applicable page on Bloomberg from which the Dealer Managers will quote the bid side prices of the applicable Reference U.S. Treasury Security.

(2) Per $1,000 principal amount of notes validly tendered before 5:00 p.m., New York City time, on December 14, 2010, not validly withdrawn and accepted for purchase.

In addition to the total consideration or the late tender offer consideration, as applicable, holders whose notes are accepted for purchase will receive accrued and unpaid interest up to, but not including, the settlement date, which is expected to be one business day after the date on which the offer expires.

The offer is subject to the satisfaction or waiver of certain conditions set forth in the Offer to Purchase, including, among other things, the issuance by NiSource Finance of at least $250 million aggregate principal amount of a new series of long-term debt securities in accordance with the terms of the financing condition more fully described in the Offer to Purchase.

The complete terms and conditions of the offer are set forth in the Offer to Purchase, dated December 1, 2010, and the related Letter of Transmittal.  Holders of the 2016 Notes and the 2019 Notes are urged to read these documents carefully before making any decision with respect to the tender offer.

Questions regarding the tender offer may be directed to the Dealer Managers, Deutsche Bank Securities Inc. at (212) 250-2955 (collect) or (866) 627-0371 (toll-free), or RBS Securities Inc. at (203) 897-6145 (collect) or (877) 297-9832 (toll-free).  Requests for documents may be directed to Global Bondholder Services Corporation, the information agent and depositary for the tender offer, at (212) 430-3774 (for banks and brokers) or (866) 952-2200 (toll-free).

This news release is for informational purposes only and does not constitute an offer to purchase or a solicitation of an offer to sell with respect to the 2016 Notes or the 2019 Notes, nor is this news release an offer to sell, a solicitation to buy or an offer to purchase or sell any securities.  The tender offer is being made only pursuant to the Offer to Purchase and only in such jurisdictions as is permitted under applicable law.

About NiSource

NiSource Inc., based in Merrillville, Ind., is a Fortune 500 company engaged in natural gas transmission, storage and distribution, as well as electric generation, transmission and distribution.  NiSource operating companies deliver energy to 3.8 million customers located within the high-demand energy corridor stretching from the Gulf Coast through the Midwest to New England.  Information about NiSource and its subsidiaries is available via the Internet at www.nisource.com. NI-F

Forward-Looking Statements

This news release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.  Those statements include statements regarding the intent, belief or current expectations of NiSource and its management.  Although NiSource believes that its expectations are based on reasonable assumptions, it can give no assurance that its goals will be achieved.  Readers are cautioned that the forward-looking statements in this news release are not guarantees of future performance and involve a number of risks and uncertainties, and that actual results could differ materially from those indicated by such forward-looking statements.  Important factors that could cause actual results to differ materially from those indicated by such forward-looking statements include, but are not limited to, the following: weather; fluctuations in supply and demand for energy commodities; growth opportunities for NiSource's businesses; increased competition in deregulated energy markets; the success of regulatory and commercial initiatives; dealings with third parties over whom NiSource has no control; actual operating experience of NiSource's assets; the regulatory process; regulatory and legislative changes; the impact of potential new environmental laws or regulations; the results of material litigation; changes in pension funding requirements; changes in general economic, capital and commodity market conditions; and counter-party credit risk, and the matters set forth in the "Risk Factors" section in NiSource's 2009 Form 10-K and 2010 Forms 10-Q, many of which risks are beyond the control of NiSource.  NiSource expressly disclaims a duty to update any of the forward-looking statements contained in this release.

SOURCE NiSource Inc.



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