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NorthWestern to replace $900 million bridge facility used to buy PPL Corp. subsidiary
By Lisa Kerner
Charlotte, N.C., Sept. 27 - NorthWestern Corp. will keep "straight forward" when it comes to the equity portion of the permanent financing of its $900 million acquisition of PPL Montana, LLC, a wholly owned subsidiary of PPL Corp., going with common rather than preferred shares, according to executives.
According to Brian B. Bird, senior vice president and chief financial officer of NorthWestern, the company chose to finance the deal from a "conservative, low-risk perspective."
"We will have in place a fully committed bridge financing from both Credit Suisse and Bank of America for the full $900 million purchase price," he said on Friday during a conference call to discuss the transaction details.
"And in conjunction with syndicating the bridge facility, NorthWestern may also seek to extend its $300 million revolver to a 2018 final maturity," he said.
NorthWestern expects to close "right into a permanent financing," according to Bird.
"The bridge is there as an insurance policy in case the markets aren't available," he said.
Permanent financing will be funded with about 50% to 55% long-term debt, with the remainder to be funded through a combination of new equity issuance and cash flow from operations.
Bird said NorthWestern will maintain "ample liquidity on a going-forward basis" to run its business.
The transaction, which NorthWestern president and chief executive officer Bob Rowe called "unique" and "transformative," is expected to close in the second half of 2014.
NorthWestern is an electricity and natural gas provider based in Butte, Mont. The company does business as NorthWestern Energy. PPL Corp. is an Allentown, Pa.-based electrical and natural gas utility company.
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