Fitch Rates Xcel Energy's $400MM Jr. Subordinated Notes 'BBB'; Outlook Stable.CHICAGO -- Fitch has rated Xcel Energy's (XEL XEL New Carlisle, Quebec, Canada - New Carlisle / via Rail Service (Airport Code) , Issuer Default Rating [IDR IDR In currencies, this is the abbreviation for the Indonesian Rupiah. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. ] of 'BBB+') $400 million junior subordinated notes due Jan. 16, 2068 'BBB'. The Rating Outlook is Stable. The notes will bear interest at 7.60% and will rank junior to all of XEL's existing debt and to the obligations of the subsidiaries. Proceeds from the issuance will be used to fund equity investments of up to $150 million in one or more of XEL' s subsidiaries and the remaining proceeds will be used to repay commercial paper. The junior subordinated notes conform to Verb 1. conform to - satisfy a condition or restriction; "Does this paper meet the requirements for the degree?" fit, meet coordinate - be co-ordinated; "These activities coordinate well" Fitch's Class D hybrid securities Hybrid Security A security that combines two or more different financial instruments. Notes: Hybrid securities generally combine both debt and equity characteristics. category and, in Fitch's evaluation of XEL's financial leverage and notes terms, will be allocated 75% to adjusted equity and 25% to adjusted debt. Key features supporting the equity categorization of these notes include the unsecured junior subordinated ranking, the option to defer de·fer 1 v. de·ferred, de·fer·ring, de·fers v.tr. 1. To put off; postpone. 2. To postpone the induction of (one eligible for the military draft). v.intr. interest payments on a cumulative basis for up to 10 years on each occasion, a 60 year maturity without an investor put provision and a replacement capital covenant for the benefit of other XEL and subsidiary note holders not to redeem, purchase or defease the securities before Jan. 16, 2038 except in certain limited circumstances. Additionally, the replacement capital covenant specifies that to the extend the notes were wholly or partially redeemed, purchased or defeased, the proceeds used to do so would have to be 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 notes. The ratings of XEL reflect the strong underlying cash flows from its regulated utilities which are growing as a result of strong electric demand growth in Minnesota and Colorado; electric and gas base rate increases and various regulatory mechanisms that allow enhanced recovery of capital spending capital spending Spending for long-term assets such as factories, equipment, machinery, and buildings that permits the production of more goods and services in future years. ; success of a growth strategy focused on growing rate base with support from regulators; and conservative capital structures at the operating utility level. Fitch's rating definitions and the terms of use Terms of Use are rules set up by the owner of an intellectual property or service to govern how they may be legally used. In many cases, terms of service are used as a contractual agreement between a company and users of a service they provide. 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 Policies and Procedures are a set of documents that describe an organization's policies for operation and the procedures necessary to fulfill the policies. They are often initiated because of some external requirement, such as environmental compliance or other governmental are also available from the 'Code of Conduct' section of this site. |
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