ITC announces tender offer pricing for 5.875%, 6.375% notes

By Toni Weeks

San Luis Obispo, Calif., May 15 - ITC Holdings Corp. announced the pricing for its cash tender offer for any and all of its outstanding $255 million of 5.875% senior notes due 2016 and its $255 million of 6.375% senior notes due 2036.

The total consideration for each $1,000 principal amount of notes accepted for purchase under the tender offer was calculated at 2 p.m. ET on Thursday using a fixed spread over an applicable reference yield, based on the bid-side price of an applicable reference security.

For the 5.875% notes, pricing was calculated using a 25-basis-point fixed spread over the 1% Treasury note due Sept. 30, 2016 for a total consideration of $1,117.39 per $1,000 principal amount of notes. For the 6.375% notes, pricing was determined using a 130-bp spread over the 3.75% Treasury note due Nov. 15, 2043 for a total consideration of $1,243.27 per $1,000 principal amount of notes.

In either case, the total consideration includes an early tender premium of $30 for notes tendered by 5 p.m. ET on May 15, the early tender date. Holders tendering notes after the early date will be eligible to receive only the tender offer consideration, namely the total consideration less the early tender premium.

The company will also pay accrued interest from the last interest payment date to, but not including, the payment date.

ITC also solicited consents to proposed amendments that modify some of the covenants contained in the indenture governing the notes. The consent solicitation expired at 5 p.m. ET on May 15. Tendered notes may no longer be withdrawn nor consents revoked.

As previously reported, holders were allowed to either tender their notes and deliver their consents to the proposed amendments at the same time or separately deliver their consents on or before the early tender and consent expiration date without tendering their notes. If holders elected to tender their notes by the early tender and consent expiration date, the tender constituted delivery of consents to the proposed amendments.

Holders who delivered consents on or before the consent expiration date without tendering their notes will receive a consent payment of $2.50 per $1,000 of notes. The consent payment is not payable to holders delivering consents by tendering notes.

ITC needs consents from holders of a majority in principal amount of the notes to authorize the proposed changes.

The cash tender offer is scheduled to expire at 11:59 p.m. ET on May 30. The settlement date will follow promptly the offer expiration date and is expected to be June 2.

The tender offer and consent solicitation are subject to a financing condition.

J.P. Morgan Securities LLC (866 834-4666 or 212 834-4811) and BofA Merrill Lynch (888 292-0070 or 980 387-3907) are the dealer managers for the tender offer and solicitation agents for the consent solicitation. D.F. King & Co., Inc. (212 269-5550 for banks and brokers or 888 869-7406) is the information agent and tender agent.

ITC Holdings is an electric transmission company based in Novi, Mich.

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