Oct. 22, 2009 (PR Newswire) --
RAPID CITY, S.D., Oct. 22 /PRNewswire-FirstCall/ -- Black Hills Corp. (NYSE: BKH) announced today that Black Hills Power, an electric utility subsidiary of Black Hills Corp., priced a $180 million bond offering (in aggregate principal amount) of 6.125 percent series AF first mortgage bonds due 2039. The bonds were priced at 99.931 percent of par and a reoffer yield of 6.13 percent. Black Hills expects the issuance and delivery to occur on October 27, 2009, subject to customary closing conditions. Net proceeds will be used to repay approximately $103.3 million of principal and interest on indebtedness borrowed from Black Hills Corporation primarily to fund the construction of Wygen III, a 110 MW coal-fired base load electric generation facility located near Gillette, Wyoming, which is expected to become operational in mid 2010. In addition, Black Hills Power expects to use approximately $27 million of net proceeds to pay the utility's remaining share of costs to complete the construction of Wygen III, and $30 million to repay the utility's Series AC, 8.06% first mortgage bonds at their maturity in February 2010. The remainder of net proceeds will be used for general purposes including other planned capital projects.
"The completion of this bond offering provides low cost, long-term financing and allows us to reduce our short-term debt as planned," said David R. Emery, chairman, president and chief executive officer of Black Hills Corp. "We are pleased to secure such attractive financing terms for our Black Hills Power utility customers for the next thirty years. Utility investments in infrastructure such as Wygen III are essential to ensure safe, reliable and reasonably priced energy for our communities and provide future earnings growth for our shareholders."
The Black Hills Power bonds will mature on November 1, 2039. Interest on the bonds will accrue and be payable semi-annually at the rate of 6.125 percent per annum. The bonds will rank equally with all of Black Hills Power's other first mortgage bonds, are secured by a lien on substantially all of Black Hills Power's utility properties, and are subject to certain exceptions and permitted liens.
RBC Capital Markets, RBS, and Scotia Capital served as joint book-running managers for the offering. Senior co-managers were BMO Capital Markets and Mitsubishi UFJ Securities, with The Williams Capital Group, L.P. and US Bancorp Investments, Inc. serving as co-managers.
Copies of the prospectus supplement relating to the offering may be obtained by calling RBC Capital Markets Corporation toll free at 1-866-375-6829, RBS Securities Inc. toll free at 1-866-884-2071 or Scotia Capital (USA) Inc. toll free at 1-800-372-3930.
