#United States #Minneapolis #Xcel Energy #Northern States Power #First Mortgage Bonds

Xcel Energy Launches Cash Tender Offers for $110 Million in Bonds

Xcel Energy Inc. (NASDAQ: XEL), headquartered in Minneapolis, has initiated cash tender offers to buy back outstanding first mortgage bonds totaling up to $110 million. The bonds in question are issued by the company's wholly owned subsidiary, Northern States Power Company (NSPM), which operates in Minnesota. This initiative aims to optimize the company's debt profile and enhance its financial flexibility in the current market environment.

Background on the Tender Offers

The tender offers were announced on December 2, 2024, and they include a comprehensive strategy to acquire various series of outstanding mortgage bonds. The company is offering cash payments for bonds that meet specific criteria, including the bonds listed in the associated table from the official announcement. The process is aimed at allowing bondholders to tender their bonds before the expiration date of December 31, 2024. Bondholders are encouraged to evaluate their options and make informed decisions, especially in regards to the Early Tender Date set for December 13, 2024.

Detailed Information About the Bonds

The tender offers cover several series of bonds with different maturity dates and interest rates. For instance, the following series are included:

• - 2.60% First Mortgage Bonds due June 1, 2051, with a principal amount outstanding of $700 million.
• - 2.90% First Mortgage Bonds due March 1, 2050, with a principal amount outstanding of $600 million.
• - 3.20% First Mortgage Bonds due April 1, 2052, with a principal amount outstanding of $425 million.
• - 3.60% First Mortgage Bonds due September 15, 2047, with a principal amount outstanding of $600 million.
• - 3.60% First Mortgage Bonds due May 15, 2046, with a principal amount outstanding of $350 million.

Each of these bonds will have specific acceptance priority levels that will determine the order in which they are accepted for tender, based on a cap of $110 million.

Process and Considerations

As part of the tender process, Xcel Energy has stressed that holders of the bonds should carefully consider the terms and conditions outlined in the official Offer to Purchase document. The document contains crucial information such as the total consideration amounts that will be calculated based on bid-side prices of U.S. Treasury Reference Securities. Holders must tender their bonds before the Early Tender Date to secure the total consideration, which includes an early tender payment in addition to accrued interest.

Xcel Energy's plans also detail that the bonds tendered before the Early Tender Date will have higher priority compared to those tendered after, regardless of acceptance priority levels. Any bonds that are not accepted for purchase due to insufficient capacity will be returned to the holders.

Next Steps

The settlement for the bonds validly tendered before or on the Early Tender Date is expected to occur by December 18, 2024, enabling Xcel Energy to solidify its financial standing promptly. For those bonds tendered after but before the expiration date, the settlement is projected for January 6, 2025.

Conclusion

Xcel Energy's cash tender offers highlight the company's proactive approach to maintaining a robust balance sheet amid fluctuating market conditions. Investors are advised to engage with financial advisors to maximize their investment strategies in light of this opportunity, ensuring they make well-informed decisions regarding their bond holdings. For further information and assistance related to the tender offers, representatives from U.S. Bancorp Investments, Inc. and D.F. King Co., Inc. are available to assist stakeholders in understanding the tendering process thoroughly.

This strategic move positions Xcel Energy to continue leading in the energy industry, focusing on sustainable practices and competitive pricing in clean energy solutions, aligning with its broader corporate goals of emission reduction and financial prudence.