Integrys lifts tender offer cap, sets clearing price by Dutch auction

By Susanna Moon

Chicago, Feb. 16 – Integrys Holding, Inc., a wholly owned subsidiary of WEC Energy Group, Inc., said it had received tenders for $248,909,000 of its $269.84 million of outstanding 6.11% junior subordinated notes due 2066 as of 5 p.m. ET on Feb. 12, the early tender date.

Integrys also lifted the maximum purchase price to $128,583,600, from $100 million, in order to allow for the purchase of all notes tendered at the clearing price, according to a company notice.

The total purchase price, or clearing price, was set at $830 for each $1,000 principal amount of notes tendered by the early tender deadline.

Integrys accepted for purchase $154,920,000 principal amount of the notes at a purchase price of $128,583,600, excluding accrued interest, with settlement set for Feb. 17.

The company said it will purchase all notes tendered by the early tender date at a bid price equal to the clearing price and those tendered without a specified bid price without proration.

The modified Dutch auction cash tender offer is set to end at 11:59 p.m. ET on Feb. 29. The offer began on Feb. 1.

Tendered notes may no longer be withdrawn.

The total bid price range was $830 to $930 for each $1,000 principal amount of notes tendered by the early tender deadline.

The total amount includes an early tender premium of $30 per $1,000 of notes.

The company also will pay accrued interest to but excluding the settlement date.

If the offer cap is further increased, those who tender after the early deadline would receive the total payment less the early premium.

Unless the tender cap is further increased, however, no notes tendered after the early deadline will be accepted for purchase.

All notes tendered at prices above the clearing price will be returned.

More details

As previously announced, holders who tendered their notes by the early deadline needed to specify the minimum total amount they would be willing to receive in exchange per $1,000 principal amount. The price had to be expressed in increments of $2.50. No bid price specified after the early tender date will be used for purposes of calculating the clearing price, and holders who tender at a bid price equal to or below the clearing price will be deemed to have tendered at the clearing price.

Integrys previously said it reserved the right to increase the tender cap without extending the withdrawal date or otherwise reinstate withdrawal rights.

Beginning Dec. 1, 2016, the coupon on the notes will float to a rate of Libor plus 212 basis points, reset quarterly, rather than stay fixed at the current rate of 6.11%. In addition, the notes are callable at par beginning Dec. 1, 2016, but Integrys said it does not intend to exercise its right to redeem the notes on the initial par call date.

The company said it may acquire the notes not purchased in the offer from time to time through open market purchases, privately negotiated transactions, tender offers, exchange offers or otherwise.

Global Bondholder Services Corp. (212 430-3774 or 866 470-4500) is the depositary and information agent.

Barclays (212 528-7581 or 800 438-3242) is the dealer manager.

Integrys is an energy holding company based in Milwaukee. WEC Energy Group, Inc., formerly Wisconsin Energy Corp., is a holding company that operates through two segments.

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