S&P Afms NIPSCO Indus, Bay State Gas; Merge Cred Neutral.NEW YORK--(BUSINESS WIRE)--Standard & Poor's CreditWire 12/19/97 --Standard & Poor's today affirmed its ratings on Northern Indiana Northern Indiana is the region of Indiana including 26 counties bordering parts of Illinois, Michigan, and Ohio. The area is generally sub-classified into other regions. The northwest is economically and culturally intertwined with Chicago, and is considered part of the Chicago Public Service Co., a subsidiary of NIPSCO NIPSCO Northern Indiana Public Service Company Industries Inc. (single-'A'-minus corporate credit rating) and on Bay State Gas Co. (see list below for ratings). The outlook on both companies is stable. About $1.4 billion of debt and preferred stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. is outstanding at Northern Indiana Public Service, versus about $240 million at Bay State. The affirmations reflect the strategic merger agreement of NIPSCO Industries and Bay State. Under the deal, NIPSCO Industries will acquire all of the common stock of Bay State in a stock-for-stock transaction valued at $780 million, including $240 million in debt and preferred stock at Bay State. The $40 share price represents a premium of 35% over the average Bay State share price for the previous 30 trading days In Business, the trading day is the time span that a particular stock exchange is open. For example, the New York Stock Exchange is, as of 2006, open from 09:30AM to 4:00PM. Trading days never take place on weekends. . Bay State stockholders will have the option of taking up to 50% of the total purchase price in cash. The existing debt of both Northern Indiana Gas & Electric and Bay State will remain outstanding after this transaction while Bay State's preferred shares Preferred shares Preferred shares give investors a fixed dividend from the company's earnings and entitle them to be paid before common shareholders. See: Preferred stock. will be redeemed by Bay State prior to the shareholder vote. Upon completion of the transaction, Bay State will become a subsidiary of NIPSCO Industries. The deal provides NIPSCO Industries strategic growth opportunities in the expanding natural gas market in the northeast United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. , further diversifies its product lines, and strengthens marketing capabilities. Nonetheless, the transaction is credit neutral since the company is merging with a much smaller entity with similar credit quality. On the other hand, Bay State's aggressive growth strategy should benefit from the support of a larger, somewhat financially stronger entity. The proposed combination strengthens the marketing resources of the nonregulated businesses under Bay State's EnergyUSA product lines. Additionally, Bay State's gas supply position should improve, enabling it to better serve the undersaturated Un`der`sat´u`ra`ted a. 1. Not fully saturated; imperfectly saturated. natural gas market in New England New England, name applied to the region comprising six states of the NE United States—Maine, New Hampshire, Vermont, Massachusetts, Rhode Island, and Connecticut. The region is thought to have been so named by Capt. . Bay State plans to file a regulatory plan requesting a rate freeze through 2005, resulting in lower rates to customers. The companies expect that the transaction will be completed within 12 months. While the boards of the two companies have approved the merger, the transaction is subject to approval by the shareholders of both companies and various regulatory agencies regulatory agency Independent government commission charged by the legislature with setting and enforcing standards for specific industries in the private sector. The concept was invented by the U.S. . OUTLOOK: STABLE Standard & Poor's initial assessment of this proposed merger will be updated as details become available. -- CreditWire
OUTSTANDING RATINGS AFFIRMED
Rating
Northern Indiana Public Service Co.
Corporate credit rating A
Senior secured debt A+
Senior unsecured debt A
Preferred stock A-
Commercial paper A-1
Bay State Gas Co.
Corporate credit rating A
Senior unsecured debt A
Preferred stock A
Commercial paper A-1
-0- CONTACT: Standard & Poor's Barbara A. Eiseman, 212/208-1656 (New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of ) Jill Sakol, 212/208-1246 (New York) For more information on criteria or subscriptions: http://www.ratings.standardpoor.com |
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