By Lisa Kerner
Charlotte, N.C., Sept. 7 - AGL Capital Corp. agreed on Aug. 31 to issue two series of senior notes totaling $275 million to institutional investors in a private placement, according to a form 8-K filing with the Securities and Exchange Commission.
The issue will include $120 million of series A notes due 2016 and $155 million of series B notes due 2018.
The company will issue the notes, which are guaranteed by parent company AGL Resources, Inc., on or before Dec. 31.
Proceeds will be used to help fund AGL Resources' proposed acquisition of Nicor Inc., the repayment of AGL Capital's outstanding commercial paper and general corporate purposes.
Fixed and floating rates
Until the third anniversary of issuance, interest is payable semiannually on the series A notes at a fixed rate of 1.91%, provided that the interest rate increases by 0.07% if the note closing occurs on or after Nov. 1 but prior to Dec. 1. If closing occurs on or after Dec. 1, it increases by 0.14%.
From the third anniversary until maturity, interest on the series A notes is payable quarterly at a floating rate equal to Libor plus 115 basis points.
Interest is payable semiannually on the series B notes at a fixed rate of 3.5%, provided that if the note closing occurs on or after Nov. 1 but prior to Dec. 1, the interest rate increases by 0.05%. If the closing occurs on or after Dec. 1, the rate on the series B notes increases by 0.10%.
Prepayment options
The note purchase agreement allows AGL Capital to optionally prepay at any time, or from time to time, any part of the notes in an amount not less than 5% of the principal amount outstanding plus a make-whole amount calculating using Treasuries plus 50 bps or, with respect to the series A notes during the floating-rate period, the Libor breakage amount.
The Libor breakage amount means any loss, cost or expense (other than lost profits) actually incurred by any holder of a series A note during the floating-rate period as a result of any payment or prepayment of any series A note on a day other than a regularly scheduled floating-rate interest payment date or at the scheduled maturity, the filing said.
AGL Resources is required to maintain a ratio of consolidated debt to total capitalization of 0.7 to 1.
Purchasers include Northwestern Mutual Life Insurance Co., Metropolitan Life Insurance Co., MetLife Insurance Co. of Connecticut, MetLife Reinsurance Co. of South Carolina, MetLife Reinsurance Co. of Charleston, MetLife Investors USA Insurance Co., Principal Life Insurance Co., Travelers Casualty and Surety Co. of America and Country Life Insurance Co.
AGL Resources is an Atlanta-based natural gas distributor.
| Issuer: | AGL Capital Corp.
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| Guarantor: | AGL Resources, Inc.
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| Issue: | Senior notes
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| Amount: | $275 million
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| Call: | Make-whole at Treasuries plus 50 bps
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| Pricing date: | Aug. 31
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| Closing: | On or before Dec. 31
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| Distribution: | Private placement
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| Purchasers: | Northwestern Mutual Life Insurance Co., Metropolitan Life Insurance Co., MetLife Insurance Co. of Connecticut, MetLife Reinsurance Co. of South Carolina, MetLife Reinsurance Co. of Charleston, MetLife Investors USA Insurance Co., Principal Life Insurance Co., Travelers Casualty and Surety Co. of America and Country Life Insurance Co.
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|
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| Series A
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| Amount: | $120 million
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| Maturity: | 2016
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| Coupon: | Fixed at 1.91% through year three, payable semiannually and subject to adjustment if notes settle after Oct. 31; then Libor plus 115 bps, payable quarterly
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|
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| Series B
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| Amount: | $155 million
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| Maturity: | 2018
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| Coupon: | Fixed at 3.5%, payable semiannually and subject to adjustment if notes settle after Oct. 31
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