Emera Incorporated announces offering of US$1.2 billion 6.75% Fixed-to-Floating Subordinated Notes, Cdn$500
million 2.90% Senior Notes and US$3.25 billion aggregate principal amount of multiple series of Senior Notes...
NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES
Emera Incorporated announces offering of US$1.2 billion 6.75% Fixed-to-Floating Subordinated Notes, Cdn$500
million 2.90% Senior Notes and US$3.25 billion aggregate principal amount of multiple series of Senior Notes as part of the funding
for the acquisition of TECO Energy, Inc.
Emera Incorporated (“Emera” or the “Company”) (TSX:EMA) announced today that it has agreed to issue and sell US$1,200,000,000
aggregate principal amount of 6.75% Fixed-to-Floating Subordinated Notes – Series 2016-A due June 2076 (the “Hybrid Notes”),
subject to the terms and conditions of an underwriting agreement and pursuant to a final prospectus supplement (the “Prospectus
Supplement”) to a short form base shelf prospectus dated June 8, 2016 (the “Base Shelf Prospectus”). J.P. Morgan Securities LLC is
acting as sole book runner and structuring agent in connection with the Hybrid Notes offering and Barclays Capital Inc., Merrill
Lynch, Pierce, Fenner & Smith Incorporated, Scotia Capital (USA) Inc. and Wells Fargo Securities, LLC are acting as co-managing
underwriters.
In addition, Emera announced today that it has agreed to issue and sell Cdn$500,000,000 aggregate principal amount of 2.90%
Senior Notes Series 2016-1 due June 16, 2023 (the “Canadian Notes”) on a private placement basis, subject to the terms and
conditions of an agency agreement and pursuant to a final offering memorandum. Scotia Capital Inc. and J.P. Morgan Securities
Canada Inc. are acting as joint book running managers in connection with the Canadian Notes offering and CIBC World Markets Inc.,
RBC Dominion Securities Inc., TD Securities Inc., BMO Nesbitt Burns Inc. and National Bank Financial Inc. are acting as co-managing
agents.
Emera also announced today that Emera US Finance LP (the “U.S. Notes Issuer”), a limited partnership wholly-owned directly and
indirectly by Emera, has agreed to sell US$3,250,000,000 aggregate principal amount of multiple series of senior, unsecured notes
(the “U.S. Notes”), fully and unconditionally guaranteed by Emera US Holdings Inc., a wholly-owned subsidiary of Emera (“EUSHI”)
and Emera (together with EUSHI, the “Guarantors”), subject to the terms and conditions of a purchase agreement and pursuant to a
final offering memorandum. J.P Morgan Securities LLC and Scotia Capital (USA) Inc. are acting as joint book running managers in
connection with the U.S. Notes offering. Barclays Capital Inc., BMO Capital Markets Corp., CIBC World Markets Corp. Merrill Lynch,
Pierce, Fenner & Smith Incorporated, RBC Capital Markets, LLC, TD Securities (USA) LLC and Wells Fargo Securities, LLC are
acting as co-managers.
Emera is undertaking the offerings of the Hybrid Notes, Canadian Notes and U.S. Notes, which together amount to gross proceeds
of approximately Cdn$6.2 billion, as part of the financing of the previously announced acquisition of TECO Energy, Inc. (“TECO
Energy”) by Emera (the “Acquisition”).
Hybrid Notes Offering
Emera will pay interest on the Hybrid Notes at a rate of 6.75% per year in equal semi-annual installments on June 15 and
December 15 of each year until June 15, 2026. Starting on June 15, 2026, Emera will pay interest on the Hybrid Notes on every March
15, June 15, September 15 and December 15 of each year during which the Hybrid Notes are outstanding thereafter until June 15,
2076.
From the closing of the offering of the Hybrid Notes to, but excluding, June 15, 2026, the interest rate on the Hybrid Notes
will be fixed at 6.75% per annum, payable in arrears. Starting on June 15, 2026, and on every March 15, June 15, September 15 and
December 15 of each year during which the Hybrid Notes are outstanding thereafter until June 15, 2076 (each such date, an “Interest
Reset Date”), the interest rate on the Hybrid Notes will be reset as follows: (i) starting on June 15, 2026, on every Interest
Reset Date until June 15, 2046, the interest rate on the Hybrid Notes will be reset at an interest rate per annum equal to the
three month LIBOR plus 5.44%, payable in arrears, with the first payment at such rate being on September 15, 2026; and (ii)
starting on June 15, 2046, on every Interest Reset Date, until June 15, 2076, the interest rate on the Hybrid Notes will be reset
on each Interest Reset Date at an interest rate per annum equal to the three month LIBOR plus 6.19%, payable in arrears, with the
first payment at such rate being on September 15, 2046.
Closing of the offering of the Hybrid Notes is expected to occur on or about June 16, 2016.
The Hybrid Notes will not be listed on any securities exchange and Emera does not intend to arrange for the Hybrid Notes to be
included on any automated quotation system. The Hybrid Notes are not being offered for sale in Canada and this press release is not
an offer of securities for sale in the United Sates. The offering of the Hybrid Notes for sale in the United States is being made
pursuant to an effective shelf registration statement of Emera previously filed with the United States Securities and Exchange
Commission. The Prospectus Supplement and the accompanying Base Shelf Prospectus may be obtained from Emera and will contain
detailed information about the Company and management, as well as financial statements.
Canadian Notes Offering
Emera will pay interest on the Canadian Notes semi-annually in arrears in equal instalments on June 16 and December 16 of each
year, commencing on December 16, 2016, and on the maturity date of the Canadian Notes.
Closing of the offering of the Canadian Notes is expected to occur on or about June 16, 2016.
The Canadian Notes are being offered in reliance upon exemptions from prospectus requirements available under applicable
Canadian securities laws. As a consequence, the resale of the Canadian Notes will be restricted in the manner provided by Canadian
securities laws. The offering of the Canadian Notes will not be registered under the United States Securities Act of 1933, as
amended (the “Securities Act”) or any state securities laws. The Canadian Notes are not being offered for sale in the United States
and this press release is not an offer of securities for sale in the United States.
The Canadian Notes will not be listed on any securities exchange and Emera does not intend to arrange for the Canadian Notes to
be included on any automated quotation system.
U.S. Notes Offering
The U.S. Notes Issuer has agreed to issue US$500 million aggregate principal amount of 2.15% Senior Notes due 2019 (the
“2019 Notes”), US$750 million aggregate principal amount of 2.70% Senior Notes due 2021 (the “2021 Notes”), US$750
million aggregate principal amount of 3.55% Senior Notes due 2026 (the “2026 Notes”) and US$1.25 billion aggregate principal
amount of 4.75% Senior Notes due 2046 (the “2046 Notes”, and together with the 2019 Notes, the 2021 Notes and the 2026 Notes,
the “notes”). The U.S. Notes Issuer will pay interest on the notes of each series semi-annually in arrears on June 15 and December
15 of each year, commencing on December 15, 2016, and on the maturity date for each series of notes.
Closing of the offering of the U.S. Notes is expected to occur on or about June 16, 2016.
The offering of the U.S. Notes and the related guarantees has not been registered under the Securities Act or any state
securities laws and the U.S. Notes and the related guarantees may not be offered or sold in the United States absent a registration
under the Securities Act or an applicable exemption from registration requirements. The U.S. Notes are being sold only to
“qualified institutional buyers” under Rule 144A of the Securities Act and to non-U.S. persons under Regulation S of the Securities
Act. The U.S. Notes are not being offered for sale in Canada and this press release is not an offer of securities for sale in the
United States. Until such time as the U.S. Notes are registered pursuant to the terms of the registration rights agreement, they
will be subject to certain restrictions on resale.
The U.S. Notes will not be listed on any securities exchange, and the U.S. Notes Issuer and the Guarantors do not intend to
arrange for the U.S. Notes to be included on any quotation system.
Use of Proceeds
Upon the closing of the Acquisition, Emera intends to use the net proceeds from the offering of the Hybrid Notes, Canadian Notes
and U.S. Notes to finance, directly or indirectly, part of the purchase price payable for the Acquisition (including
acquisition-related expenses) and to reduce amounts outstanding under the credit facilities established in favour of Emera to fund
the purchase price payable for the Acquisition, to the extent any amounts are drawn on such facilities in connection with the
Acquisition. If certain of the net proceeds from the offering of the Hybrid Notes, Canadian Notes and/or U.S. Notes are not
otherwise required to complete the Acquisition, Emera intends to use such net proceeds for general corporate purposes.
If (i) the Acquisition is not consummated on or prior to the later of December 31, 2016 and the date that is no later than June
30, 2017 if the closing of the Acquisition has been extended by Emera or TECO Energy in accordance with the terms of the agreement
and plan of merger relating to the Acquisition (the “Acquisition Agreement”) (as such date may be extended, the “special mandatory
redemption triggering date”) or (ii) the Acquisition Agreement is terminated at any time prior to the special mandatory redemption
triggering date, then Emera will be required to redeem the Hybrid Notes and the portion of the Canadian Notes that is in excess of
$300 million aggregate principal amount on a pro rata basis, and the U.S. Notes Issuer will be required to redeem any U.S.
Notes.
Forward Looking Information
This news release contains forward-looking information within the meaning of applicable securities laws with respect to, among
other things, the Acquisition and the intended use of the net proceeds from the sale of the Hybrid Notes, the Canadian Notes and
U.S. Notes. By its nature, forward-looking information requires Emera to make assumptions and is subject to inherent risks and
uncertainties. These statements reflect the current beliefs of the management teams of Emera and are based on information currently
available to Emera. There is a risk that predictions, forecasts, conclusions and projections that constitute forward-looking
information will not prove to be accurate, that the assumptions of Emera may not be correct and that actual results may differ
materially from such forward-looking information. Additional detailed information about these assumptions, risks and uncertainties
with respect to Emera is included in Emera's securities regulatory filings, including under the heading "Business Risks and Risk
Management" in Emera's annual Management's Discussion and Analysis, and under the heading "Principal Risks and Uncertainties" in
the notes to Emera's annual and interim financial statements. The securities regulatory filings of Emera can be found on SEDAR at
www.sedar.com. Except as required by law, Emera disclaims any intention or obligation to update or revise any
forward-looking statements, whether as a result of new information, future events or otherwise.
About Emera
Emera is a geographically diverse energy and services company headquartered in Halifax, Nova Scotia with approximately CAD$11.5
billion in assets and 2015 revenues of CAD$2.79 billion. Emera invests in electricity generation, transmission and distribution, as
well as gas transmission and utility energy services. Emera’s strategy is focused on the transformation of the electricity industry
to cleaner generation and the delivery of that clean energy to market. Emera has investments throughout northeastern North America
and in four Caribbean countries. Emera continues to target having 75-85% of its adjusted earnings come from rate-regulated
businesses. Emera’s common and preferred shares are listed on the Toronto Stock Exchange and trade respectively under the symbol
EMA, EMA.PR.A, EMA.PR.B, EMA.PR.C, EMA.PR.E, and EMA.PR.F, and instalment receipts are listed and trade under the symbol EMA.IR.
Depositary receipts representing common shares of Emera are listed on the Barbados Stock Exchange under the symbol EMABDR.
Additional Information can be accessed at www.sedar.com.
Emera Incorporated
Investor Relations:
Scott LaFleur, 902-428-6375
Scott.lafleur@emera.com
or
Media:
Neera Ritcey, 902-223-2272
neera.ritcey@emera.com
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