Dominion Energy South Carolina Launches Cash Tender Offer For Certain Outstanding Debt Securities

Staff Report From South Carolina CEO

Thursday, August 29th, 2019

Dominion Energy South Carolina, Inc. (DESC), a wholly owned subsidiary of Dominion Energy, Inc., announced the commencement of an offer to purchase for cash up to $400,000,000 aggregate principal amount (the Offer Cap) of its 4.250% First Mortgage Bonds due 2028, 4.350% First Mortgage Bonds due 2042 and 4.600% First Mortgage Bonds due 2043 (collectively, the Bonds) (such offer, the Offer); provided, that the Bonds tendered in the Offer shall be subject to the Offer Cap, the Acceptance Priority Levels (defined below), the Early Tender Priority (defined below) and proration, as applicable.

The table below sets forth, among other things, the CUSIP numbers and principal amounts outstanding with respect to the Bonds in the Offer:

Title of Security

CUSIP Number

Principal Amount Outstanding

Acceptance Priority Level

Reference U.S.
Treasury Security

Bloomberg Reference Page

Early Tender Premium
(per $1,000)(1)

Fixed Spread (basis points)

4.250% First Mortgage
Bonds due 2028

837004CM0

$400,000,000

1

1.625% due August 15,
2029

FIT1

$30

65

4.350% First Mortgage
Bonds due 2042

837004CF5

$324,433,000

2

2.875% due May 15, 2049

FIT1

$30

95

4.600% First Mortgage
Bonds due 2043
_______________

 

837004CG3

$400,000,000

3

2.875% due May 15, 2049

FIT1

$30

100

 

(1)          The total consideration for the Bonds validly tendered prior to the Early Tender Deadline (defined below) and accepted for purchase will include the applicable Early Tender Premium.

The terms and conditions of the Offer are described in the Offer to Purchase, dated Aug. 28, 2019 (the Offer to Purchase).  Copies of the Offer to Purchase are available at www.dfking.com/dominion.

The Offer

The Offer will expire at 11:59 p.m., New York City time, on Sept. 25, 2019, unless extended or earlier terminated by DESC (such date and time, as the same may be extended, the Expiration Time). The consideration to be paid in the Offer for each $1,000 principal amount of Bonds that are validly tendered will be determined in the manner described in the Offer to Purchase by reference to the applicable fixed spread specified in the table above, which is inclusive of the Early Tender Premium, plus the applicable yield based on the bid-side price of the applicable Reference U.S. Treasury Security specified in the table above (the Total Consideration), calculated as of 10:00 a.m., New York City time, on Sept. 12, 2019, the first business day following the Early Tender Deadline. Holders of Bonds (Holders) must validly tender and not properly withdraw their Bonds at or prior to 5:00 p.m., New York City time, on Sept. 11, 2019, unless extended by DESC (such date at time, as the same may be extended, the Early Tender Deadline), to be eligible to receive, subject to the Offer Cap, the Acceptance Priority Levels and proration, as applicable, the applicable Total Consideration, which includes the Early Tender Premium (as set forth in the table above), plus accrued interest.  Any Bonds validly tendered after the Early Tender Deadline but prior to or at the Expiration Time will be eligible to receive only the applicable Late Tender Offer Consideration (as defined in the Offer to Purchase), plus accrued interest.  Validly tendered Bonds may be withdrawn at any time at or prior to 5:00 p.m., New York City time, on Sept. 11, 2019, unless extended by DESC (such date and time, as the same may be extended, the Withdrawal Deadline), but not thereafter.

Subject to the Offer Cap, Bonds will be accepted for purchase based on the acceptance priority levels set forth in the table above (such priority levels, the Acceptance Priority Levels).  If the Offer is not fully subscribed as of the Early Tender Deadline, all Bonds validly tendered prior to or at the Early Tender Deadline will have priority over any Bonds validly tendered after the Early Tender Deadline, regardless of the Acceptance Priority Level of such bonds (such priority, the Early Tender Priority).  Furthermore, if the Offer is fully subscribed as of the Early Tender Deadline, Holders who tender their Bonds following the Early Tender Deadline will not have any of their Bonds accepted for purchase.  Bonds of a given series may be subject to proration if the aggregate principal amount of such Bonds validly tendered would cause the Offer Cap to be exceeded.

The Early Settlement Date is the date that DESC accepts for purchase Bonds validly tendered and not withdrawn at or prior to the Early Tender Deadline, and the Final Settlement Date is the date that DESC accepts for purchase Bonds validly tendered after the Early Tender Deadline but prior to or at the Expiration Time, if any; provided, in each case, that all applicable conditions have been satisfied or waived by DESC.  DESC currently expects the Early Settlement Date and the Final Settlement Date to be the second business day following the Early Tender Deadline and Expiration Time, respectively.