Loan & DebtSep 21, 2026, 02:53 PM
Fortis Inc. Issues $1B in Junior Subordinated Notes
AI Summary
Fortis Inc. has filed a second and third supplemental indenture to establish two new series of junior subordinated notes: 6.625% Fixed-to-Fixed Rate Junior Subordinated Notes due 2057 and 6.875% Fixed-to-Fixed Rate Junior Subordinated Notes due 2057. Each series has an aggregate principal amount of $500,000,000. The notes are unsecured and subordinated obligations. Interest rates are fixed initially and then reset based on the 5-Year Treasury Rate, with floors in place. Fortis Inc. retains the right to defer interest payments for up to 10 years and has options for early redemption under specific circumstances, including Tax Events and Rating Events.
Key Highlights
- Fortis Inc. establishes two new series of junior subordinated notes: 6.625% Fixed-to-Fixed Rate Junior Subordinated Notes due 2057 and 6.875% Fixed-to-Fixed Rate Junior Subordinated Notes due 2057.
- Each series of notes has an aggregate principal amount of $500,000,000.
- The notes are unsecured and subordinated obligations of Fortis Inc.
- Interest on the 6.625% notes will be 6.625% per annum until March 30, 2032, then reset to 5-Year Treasury Rate plus 2.016%, with a floor of 6.625%.
- Interest on the 6.875% notes will be 6.875% per annum until March 30, 2037, then reset to 5-Year Treasury Rate plus 2.016%, with a floor of 6.875%.
- Fortis Inc. has the option to defer interest payments for up to 10 consecutive years on both note series.
- The notes are redeemable at Fortis Inc.'s option under certain conditions, including after December 31, 2031 for the 6.625% notes and after December 31, 2036 for the 6.875% notes.
- Redemption prices vary, with a 100% redemption price for Tax Events and 102% for Rating Events on the 6.875% notes.
Price Impact
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