Fortis Inc. to Renew At-The-Market Equity Program

Rhea-AI Summary

Fortis Inc. (TSX/NYSE: FTS) announced the renewal of its at-the-market equity program (ATM Program), allowing the issuance of up to C$500,000,000 (or US dollar equivalent) in common shares. The shares will be sold through the TSX and NYSE at prevailing market prices, with the program effective until January 10, 2027. The ATM Program provides additional financing flexibility for Fortis's capital program, with proceeds intended for general corporate purposes. The distribution will be managed through an equity distribution agreement with several major financial institutions acting as Canadian and US agents.

Positive

• Secured additional financing flexibility through C$500 million ATM program
• Extended program duration until January 2027
• Established distribution agreements with major financial institutions

Negative

• Potential dilution of existing shareholders through new share issuance
• Variable pricing structure may result in share price fluctuations

Insights

Financial Analyst

The renewal of Fortis' C$500 million ATM Program represents a significant financing strategy that provides enhanced capital flexibility. This equity distribution mechanism allows Fortis to issue shares at market prices, potentially minimizing dilution compared to traditional equity offerings. The program's extension until January 2027 through major financial institutions like CIBC, RBC, Scotia and TD demonstrates strong institutional backing.

The timing is strategic as utilities typically require substantial capital for infrastructure investments. This facility enables Fortis to opportunistically tap equity markets when conditions are favorable, supporting their capital program without the execution risk and higher costs associated with traditional follow-on offerings. The market-based pricing mechanism helps ensure fair value realization while maintaining financial flexibility.

Market Research Analyst

The ATM program renewal reflects robust capital markets strategy, particularly important given Fortis' C$22.1 billion market cap. The structure allows for gradual share issuance that can better absorb market demand compared to large one-time offerings. The dual-listing approach on both TSX and NYSE provides access to broader investor bases and enhanced liquidity pools.

The involvement of major Canadian and U.S. investment banks creates a strong distribution network. The program's flexibility to issue in either Canadian or U.S. dollars adds valuable currency hedging options. This financing tool positions Fortis well for executing its growth initiatives while maintaining optimal capital structure.

ST. JOHN'S, Newfoundland and Labrador, Dec. 09, 2024 (GLOBE NEWSWIRE) -- Fortis Inc. ("Fortis" or the "Corporation") (TSX/NYSE: FTS) announced today that it will renew its at-the-market equity program (the "ATM Program") allowing the Corporation to issue up to C$500,000,000 (or its U.S. dollar equivalent) of common shares (the "Common Shares") from treasury to the public from time to time, at the Corporation's discretion. Any Common Shares sold in the ATM Program will be sold through the Toronto Stock Exchange (the "TSX"), the New York Stock Exchange (the "NYSE") or any other marketplace on which the Common Shares are listed, quoted or otherwise traded at the prevailing market price at the time of sale.

The ATM Program provides Fortis with additional financing flexibility to fund its capital program. The volume and timing of distributions under the ATM Program, if any, will be determined at the Corporation's sole discretion. The ATM Program will be effective until January 10, 2027, unless terminated prior to such date by the Corporation. Fortis intends to use the net proceeds from the ATM Program, if any, for general corporate purposes. As Common Shares sold in the ATM Program will be distributed at the prevailing market price at the time of the sale, prices may vary among purchasers during the period of the distribution.

Distributions of the Common Shares through the ATM Program will be made pursuant to the terms of an equity distribution agreement dated December 9, 2024 (the "Equity Distribution Agreement") entered into with CIBC World Markets Inc., RBC Dominion Securities Inc., Scotia Capital Inc. and TD Securities Inc., as Canadian agents (the "Canadian Agents"), and CIBC World Markets Corp., RBC Capital Markets, LLC, Scotia Capital (USA) Inc. and TD Securities (USA) LLC, as U.S. agents (together with the Canadian Agents, the "Agents").

The ATM Program is being established pursuant to: (a) a prospectus supplement dated December 9, 2024 (the "Prospectus Supplement") to the Corporation's Canadian short form base shelf prospectus (the "Shelf Prospectus") filed today with securities regulatory authorities in each of the provinces of Canada; and (b) a prospectus supplement dated December 9, 2024 (the "U.S. Prospectus Supplement") to the Corporation's U.S. base prospectus (the "U.S. Base Prospectus") included in its U.S. registration statement on Form F-10 (the "Registration Statement") filed today with the U.S. Securities and Exchange Commission. The Corporation's at-the-market equity program, which commenced on September 19, 2023, terminated upon filing of the Shelf Prospectus.

The Prospectus Supplement, the Shelf Prospectus and the Equity Distribution Agreement will be available on SEDAR+ at www.sedarplus.ca. The U.S. Prospectus Supplement, the U.S. Base Prospectus and the Registration Statement will be available on EDGAR at www.sec.gov. Alternatively, the Agents will send copies of the Prospectus Supplement and the Shelf Prospectus or the U.S. Prospectus Supplement and the U.S. Base Prospectus, as applicable, upon request by contacting in Canada:

CIBC Capital Markets, 161 Bay Street, 5th Floor, Toronto, Ontario, M5J 2S8 or by telephone at 1-416-956-6378 or by email at Mailbox.CanadianProspectus@cibc.com

RBC Dominion Securities Inc., attn: Distribution Centre, RBC Wellington Square, 8th Floor, 180 Wellington Street West, Toronto, Ontario, M5J OC2, by email at Distribution.RBCDS@rbc.com

Scotia Capital Inc., attn: Equity Capital Markets, 40 Temperance Street, 6th Floor, Toronto, Ontario, M5H 0B4, by email at equityprospectus@scotiabank.com

TD Securities Inc., attn: Symcor, NPM, 1625 Tech Avenue, Mississauga, Ontario, L4W 5P5, by email at sdcconfirms@td.com or by phone at 289-360-2009

or in the U.S.:

CIBC Capital Markets, 161 Bay Street, 5th Floor, Toronto, Ontario, M5J 2S8 or by telephone at 1-416-956-6378 or by email at Mailbox.USProspectus@cibc.com

RBC Capital Markets, LLC, attn: Equity Syndicate, 200 Vesey Street, 8th Floor, New York, New York 10281-8098, by email at equityprospectus@rbccm.com or by phone at 877-822-4089

Scotia Capital (USA) Inc., attn: Equity Capital Markets, 250 Vesey Street, 24th Floor, New York, New York 10281, by email at equityprospectus@scotiabank.com

TD Securities (USA) LLC, attn: Equity Capital Markets, 1 Vanderbilt Avenue, New York, New York 10017, by email at TD.ECM_Prospectus@tdsecurities.com

This news release does not constitute an offer to sell or the solicitation of an offer to buy the Common Shares, nor shall there be any sale of these securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

About Fortis

Fortis is a well-diversified leader in the North American regulated electric and gas utility industry with 2023 revenue of $12 billion and total assets of $70 billion as at September 30, 2024. The Corporation's 9,600 employees serve utility customers in five Canadian provinces, ten U.S. states and three Caribbean countries.

Fortis shares are listed on the TSX and NYSE and trade under the symbol FTS. Additional information can be accessed at www.sedarplus.ca or www.sec.gov.

Forward-Looking Information

Fortis includes "forward-looking information" in this news release within the meaning of applicable Canadian securities laws and "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 (collectively referred to as "forward-looking information"). Forward-looking information included in this news release reflects expectations of Fortis' management regarding future growth, results of operations, performance and business prospects and opportunities. Wherever possible, words such as anticipates, believes, budgets, could, estimates, expects, forecasts, intends, may, might, plans, projects, schedule, should, target, will, would and other similar terminology or expressions have been used to identify the forward-looking information, which includes, without limitation, the renewal of the Corporation's ATM Program, the filing by the Corporation of the Prospectus Supplement and U.S. Prospectus Supplement, the aggregate value of Common Shares which may be issued pursuant to the ATM Program and the Corporation's expected use of the net proceeds of the ATM Program, if any.

Forward-looking information involves significant risks, uncertainties and assumptions. Certain material factors or assumptions have been applied in drawing the conclusions contained in the forward-looking information. These factors or assumptions are subject to inherent risks and uncertainties surrounding future expectations generally, including those identified from time to time in the forward-looking information. Fortis cautions readers that a number of factors could cause actual results, performance or achievements to differ materially from the results discussed or implied in the forward-looking information. For additional information with respect to certain of these risks or factors and risk factors relating to the Common Shares, reference should be made to the Prospectus Supplement filed, together with the Shelf Prospectus and the continuous disclosure materials filed from time to time by Fortis with Canadian securities regulatory authorities and the U.S. Securities and Exchange Commission. All forward-looking information included in this news release is given as of the date of this news release and, except as required by law, we disclaim any intention or obligation to revise or update any forward-looking information, whether as a result of new information, future events or otherwise.

A .pdf version of this press release is available at: http://ml.globenewswire.com/Resource/Download/b4dcd653-6d19-4a3b-b929-54e902a99290

For more information, please contact:

Investor Enquiries: Ms. Stephanie Amaimo Vice President, Investor Relations Fortis Inc. 248.946.3572 investorrelations@fortisinc.com

Media Enquiries: Ms. Karen McCarthy Vice President, Communications & Government Relations Fortis Inc. 709.737.5323 media@fortisinc.com

FAQ

What is the size of Fortis's (FTS) new ATM Program?

Fortis's new ATM Program allows for the issuance of up to C$500,000,000 (or its U.S. dollar equivalent) of common shares.

When does Fortis's (FTS) new ATM Program expire?

The ATM Program will be effective until January 10, 2027, unless terminated earlier by the

How will Fortis (FTS) use the proceeds from the ATM Program?

Fortis intends to use the net proceeds from the ATM Program for general corporate purposes.

Where will Fortis (FTS) shares under the ATM Program be traded?

The shares will be traded through the Toronto Stock Exchange (TSX), the New York Stock Exchange (NYSE), or any other marketplace where Fortis common shares are listed.