(Source: Business Wire)
Fitch Ratings assigns a 'BBB' rating to Dominion Resources, Inc.'s (Dominion) 2009 series A 8.375% enhanced junior subordinated notes. Proceeds from the issuance will be used for general corporate purposes. The Rating Outlook is Stable.
The subordinated notes are obligations of Dominion (IDR 'BBB+') and will rank junior and be subordinated in right of payment and upon liquidation to all Dominion's senior indebtedness.
So long as there is no event of default under the subordinated indenture, Dominion may at its option defer interest payments on the series A notes, from time to time, for one or more periods of up to 10 consecutive years each time.
The instruments conform to Fitch's class D hybrid securities category and will be allocated 75% to adjusted equity and 25% to adjusted debt in Fitch's evaluation of Dominion's financial leverage. Features supporting the equity categorization of these debentures include their junior subordinate priority, the option to defer interest payments on a cumulative basis for up to 10 years on each occasion, a greater than 50-year maturity without an investor put provision, and a replacement capital covenant. Pursuant to the replacement capital covenant, Dominion is obligated not to redeem, purchase or defease the securities before June 15, 2034 (which can be extended) except in certain limited circumstances and to the extent that a specified amount of proceeds shall have been raised from the issuance of qualifying securities that have equity-like characteristics that are the same as, or more equity-like than, the applicable characteristics of the junior subordinated debentures at the time of redemption, purchase or defeasance.
Dominion is a diversified producer and transporter of energy. The company owns a regulated electric utility, natural gas transmission and storage, wholesale generation and other operations.
Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.
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