Hydro One Inc. Launches $750 Million Offering of Medium Term Notes for Sustainable Projects

Hydro One Inc. Launches $750 Million Medium Term Notes Offering

Hydro One Limited, known as the largest provider of electricity transmission and distribution in Ontario, has recently made headlines with its announcement regarding the launch of a significant Medium Term Notes (MTN) offering. The company has priced an offering totaling $750 million, marking a crucial step in its commitment to sustainable financing under the 2024 Sustainable Financing Framework.

The MTN offering is split into two main series: Series 55 Notes and Series 60 Notes, each targeting different timelines and yields. The offering includes an additional $375 million in Series 55 Notes, maturing in 2053 with a coupon rate of 4.46% and a re-opening yield of 4.362%. Similarly, the company will offer another $375 million in Series 60 Notes, set to mature in 2035 with a slightly lower coupon rate of 4.25%, and a re-opening yield of 3.938%. The pricing of these notes is strategically designed to attract investors while supporting Hydro One's ongoing development and sustainability initiatives.

The proceeds from this issuance are anticipated to be approximately $762 million after taking into account accrued interest. Hydro One plans to use the funds specifically for financing or refinancing eligible green and social projects that align with their sustainability framework, particularly focusing on new and existing initiatives that promote environmental and social benefits across Ontario's communities.

Upon the closing of this offering on December 11, 2024, Hydro One will have outstanding debt commitments totaling $675 million in Series 55 Notes and $1.075 billion in Series 60 Notes. This proactive move reflects Hydro One’s dedication to not only maintaining its robust electricity infrastructure but also enhancing its role in sustainable development, aligning with public interests and global environmental standards.

The transaction is conducted on a best-efforts basis across Canada, supported by a consortium of agents, allowing investors from various provinces to participate in this sustainable investment opportunity. Hydro One Inc.’s commitment to transparency is evident as it will provide additional documentation, including the necessary pricing supplements and base shelf prospectus, storing detailed information online for potential investors.

Hydro One has made clear that while they aim to allocate net proceeds from these notes toward eligible projects, any failure to do so will not constitute an event of default. This flexibility underscores the company’s prudent management of its financial strategies while continuing to prioritize the sustainability of its operations.

The expansion of their investment into green projects is part of Hydro One’s broader strategy to support economic growth in Ontario. In 2023, the company notably invested $2.5 billion in transmission and distribution networks, emphasizing Hydro One’s vital role in fostering community welfare through job creation and environmentally conscious projects. With approximately 1.5 million customers relying on their service, Hydro One is committed to building and maintaining a safe and reliable electricity system—a cornerstone for successful communities across the region.

To facilitate this ambition, Hydro One is also committed to diversity and community engagement, ensuring that its sustainable practices benefit all Ontarians. As Hydro One Limited's stock is listed on the TSX, the news of this recent offering reflects a promising outlook for investors inclined toward socially responsible investment opportunities.

Overall, Hydro One's $750 million Medium Term Note offering underscores its dual focus on enhancing its financial capacities while championing sustainability—an approach critical for navigating the future of energy demands and environmental stewardship in Ontario.

For more information and updates regarding this offering, stakeholders can refer to Hydro One's website or engage with their shareholder communications.