A billion of hybrid paper. The rate base plan does not change tonight
Fortis Inc. (TSX: FTS, NYSE: FTS) announced September 9 it priced a public offering of US$500 million of 6.625 percent fixed-to-fixed rate junior subordinated notes and US$500 million of 6.875 percent notes, both due March 30, 2057. Settlement is September 21, subject to customary closing conditions.
The 6.625 percent notes keep that coupon into March 30, 2032, then reset to the five-year Treasury rate plus 2.016 percent, with a floor at 6.625 percent. The 6.875 percent notes reset after March 30, 2037 to five-year Treasuries plus 2.042 percent, floored at 6.875 percent. Both priced at par.
Fortis said it expects to use net proceeds to repay indebtedness and for general corporate purposes. This is holding-company paper against a regulated utility book, not a new generating station. The five-year consolidated capital plan Fortis has outlined stays the operating story. Tilbury Phase 1B at FortisBC is a separate B.C. file.
Morgan Stanley, MUFG, Wells Fargo, and BofA Securities co-led the syndicate. The notes sit under Fortis's December 9, 2024 base shelf and Form F-10.
Neutral read
FTS is on the listed power list. Banks were skipped. US$1 billion priced September 9 and a September 21 close are the facts. Write this as a refinancing, not as a rate-case win. Watch whether the notes actually settle Monday week and how much of the proceeds retire short-term debt versus sitting as cash.