Xcel Energy Announces the Early Results of its Cash Tender Offers for Outstanding First Mortgage Bonds Issued by Northern States Power Company (a Minnesota corporation)

Rhea-AI Summary

Xcel Energy (XEL) announced the early results of its cash tender offers to purchase up to $110,000,000 of outstanding first mortgage bonds issued by Northern States Power Company (NSPM). The company anticipates increasing the aggregate tender cap based on U.S. Treasury Reference Security pricing.

The tender offer primarily focuses on the 2.60% First Mortgage Bonds due 2051, with $440,456,000 principal amount tendered out of $700,000,000 outstanding. Even with a potential cap increase, Xcel Energy doesn't expect to accept bonds from other series.

Holders who validly tendered by the Early Tender Date will receive the Total Consideration, including a $30 per $1,000 early tender payment. The settlement date is expected to be December 18, 2024, and the offer expires on December 31, 2024.

Positive

• Potential increase in aggregate tender cap from initial $110 million
• Strong early tender participation with $440.46 million of 2051 bonds tendered
• Early tender payment of $30 per $1,000 principal amount offered to participating bondholders

Negative

• acceptance of bonds, focusing only on 2051 series despite multiple series being offered
• No acceptance expected for tenders after Early Tender Date due to oversubscription

Insights

Financial Analyst

This tender offer represents a significant debt management initiative by Xcel Energy, targeting up to $110 million of outstanding first mortgage bonds, with potential for increase. The focus on the 2051 Bonds, which received $440.46 million in tender offers, indicates strong holder participation and exceeds the initial tender cap substantially.

The early tender payment of $30 per $1,000 principal amount provides an attractive incentive for bondholders to participate. This debt restructuring effort could potentially lower Xcel's interest expense and extend its debt maturity profile, though the final impact will depend on the pricing terms to be announced.

Market Research Analyst

The strategic timing of this tender offer, coupled with the flexibility to increase the aggregate tender cap, demonstrates Xcel's proactive approach to liability management. The high participation rate in the 2051 Bonds suggests investors are receptive to the company's debt optimization strategy. The decision not to accept tenders after the Early Tender Date indicates strong initial demand and efficient execution of the offer.

This transaction aligns with broader market trends of utilities optimizing their debt structures in response to the current interest rate environment.

MINNEAPOLIS--(BUSINESS WIRE)-- Xcel Energy Inc. (NASDAQ: XEL) (Xcel Energy) announced today the early results of its previously announced offers to purchase for cash (the Tender Offers) in the order of priority set forth in the table below up to $110,000,000 aggregate principal amount (the Aggregate Tender Cap) of certain outstanding first mortgage bonds issued by Northern States Power Company, a Minnesota corporation (NSPM), a wholly owned subsidiary of Xcel Energy (the Bonds), pursuant to an Offer to Purchase, dated December 2, 2024 (the Offer to Purchase). Xcel Energy also announced that it anticipates increasing the Aggregate Tender Cap depending on the bid-side price of the applicable “U.S. Treasury Reference Security” to be determined at 10:00 a.m., New York City time, later today, December 16, 2024. Even if Xcel Energy increases the Aggregate Tender Cap, Xcel Energy does not expect to accept for purchase Bonds of any series other than the 2051 Bonds (as defined below). The terms and conditions of the Tender Offers are described in the Offer to Purchase and remain unchanged, except as described in this press release.

The table below summarizes certain information regarding the Bonds and the Tender Offers according to information provided by D.F. King & Co., Inc.:

Title of Security	CUSIP Number	Issuer	Principal Amount Outstanding	Acceptance Priority Level(1)	Principal Amount Tendered
2.60% First Mortgage Bonds, Series due June 1, 2051 (the 2051 Bonds)	665772 CS6	Northern States Power Company (a Minnesota corporation)	$700,000,000	1	$440,456,000
2.90% First Mortgage Bonds, Series due March 1, 2050	665772 CR8	Northern States Power Company (a Minnesota corporation)	$600,000,000	2	(2)
3.20% First Mortgage Bonds, Series due April 1, 2052	665772 CU1	Northern States Power Company (a Minnesota corporation)	$425,000,000	3
3.60% First Mortgage Bonds, Series due September 15, 2047	665772 CQ0	Northern States Power Company (a Minnesota corporation)	$600,000,000	4
3.600% First Mortgage Bonds, Series due May 15, 2046	665772 CP2	Northern States Power Company (a Minnesota corporation)	$350,000,000	5

_______________
(1)	The Tender Offers with respect to the Bonds are subject to the Aggregate Tender Cap.
(2)	Even if Xcel Energy increases the Aggregate Tender Cap, Xcel Energy does not expect to accept for purchase Bonds of any series other than the 2051 Bonds.

The amount of Bonds accepted for purchase will be determined pursuant to the terms and conditions of the Tender Offers as set forth in the Offer to Purchase. Bonds not accepted for purchase will be promptly credited to the account of the registered holder of such Bonds with The Depository Trust Company and otherwise returned in accordance with the Offer to Purchase.

Holders of Bonds that were validly tendered and not validly withdrawn on or prior to the Early Tender Date and that are accepted for purchase are eligible to receive the Total Consideration, which includes an early tender payment of $30 per $1,000 principal amount of Bonds validly tendered and not validly withdrawn by such holders and accepted for purchase by Xcel Energy (the Early Tender Payment). The Total Consideration offered per $1,000 principal amount of Bonds validly tendered and accepted for purchase pursuant to the Tender Offers will be determined in the manner described in the Offer to Purchase by reference to the fixed spread for such Bonds specified in the table above plus the yield to maturity based on the bid-side price of the U.S. Treasury Reference Security as quoted on the page on the Bloomberg Bond Trader PX1 page at 10:00 a.m., New York City time, today. Accrued and unpaid interest up to, but not including, the settlement date will be paid in cash on all validly tendered Bonds accepted and purchased by Xcel Energy in the Tender Offers. Xcel Energy expects to issue a press release today, December 16, 2024, to announce the Reference Yield that will be used in determining the Total Consideration payable in connection with the Tender Offers as well as the final principal amount accepted and the final upsize amount, if applicable. The settlement date for the Bonds accepted for purchase by Xcel Energy in connection with the Early Tender Date is expected to be December 18, 2024. In accordance with the terms of the Tender Offers, the withdrawal date was 5:00 p.m., New York City time, on December 13, 2024. As a result, tendered Bonds may no longer be withdrawn, except in certain limited circumstances where additional withdrawal rights are required by law.

The Tender Offers will expire at 5:00 p.m., New York City time, on December 31, 2024, or any other date and time to which Xcel Energy extends such Tender Offers, unless earlier terminated. Even if Xcel Energy increases the Aggregate Tender Cap, Xcel Energy does not expect to accept for purchase any tender of Bonds after the Early Tender Date because the amount of Bonds validly tendered and not validly withdrawn at or prior to the Early Tender Date exceeds the Aggregate Tender Cap.

Xcel Energy or its affiliates (including NSPM) may from time to time, after completion of the applicable Tender Offers, purchase additional Bonds in the open market, in privately negotiated transactions, through one or more additional tender or exchange offers, or otherwise, or NSPM may redeem Bonds that it is permitted to redeem pursuant to their terms. In addition, from time to time, including during the Tender Offers, Xcel Energy or its affiliates (including NSPM) may purchase certain of NSPM's first mortgage bonds that are not subject to the Tender Offers in the open market, in privately negotiated transactions, through tender or exchange offers, or otherwise, or NSPM may redeem such first mortgage bonds that it is permitted to redeem pursuant to their terms. Any future purchases by Xcel Energy or its affiliates (including NSPM) will depend on various factors existing at that time.

Xcel Energy’s obligation to accept for purchase and to pay for the Bonds in the Tender Offers is subject to the satisfaction or waiver of a number of conditions described in the Offer to Purchase. Xcel Energy reserves the right, subject to applicable law, to (i) waive any and all conditions to any of the Tender Offers, (ii) extend or terminate any of the Tender Offers, (iii) increase or decrease the Aggregate Tender Cap, or (iv) otherwise amend any of the Tender Offers in any respect.

Information Relating to the Tender Offer

U.S. Bancorp Investments, Inc. is serving as Dealer Manager in connection with the Tender Offers. D.F. King & Co., Inc. is serving as Tender and Information Agent in connection with the Tender Offers. Copies of the Offer to Purchase or any other documents are available by contacting D.F. King & Co., Inc. via email at Xcel@dfking.com or by phone at (800) 769-7666 (toll-free) or (212) 269-5550 (banks and brokers). Questions regarding the Tender Offers should be directed to U.S. Bancorp Investments, Inc., Liability Management Group at (917) 558-2756 (collect) or (800) 479-3441 (toll-free).

None of Xcel Energy, its affiliates, the Dealer Manager, D.F. King & Co., Inc. or the trustee with respect to any series of Bonds makes any recommendation to any holder whether to tender or refrain from tendering any or all of such holder’s Bonds or how much they should tender, and none of them has authorized any person to make any such recommendation. Holders are urged to evaluate carefully all information in the Offer to Purchase, consult their own investment and tax advisors and make their own decisions with respect to the Tender Offers.

This press release does not constitute an offer to sell or the solicitation of an offer to buy these securities. The Tender Offers are being made only pursuant to the Offer to Purchase and only in such jurisdictions as is permitted under applicable law.

The full details of the Tender Offers, including complete instruction on how to tender Bonds, are included in the Offer to Purchase. The Offer to Purchase contains important information that should be read by holders of Bonds before making a decision to tender any Bonds. The Offer to Purchase may be obtained from D.F. King & Co., Inc., free of charge, by calling (800) 769-7666 (toll-free) or (212) 269-5550 (banks and brokers), or emailing at Xcel@dfking.com.

About Xcel Energy

Xcel Energy (NASDAQ: XEL) provides the energy that powers millions of homes and businesses across eight Western and Midwestern states. Headquartered in Minneapolis, the company is an industry leader in responsibly reducing carbon emissions and producing and delivering clean energy solutions from a variety of renewable sources at competitive prices.

This press release contains forward-looking statements regarding, among other things, Xcel Energy’s expectations regarding the Tender Offers. Xcel Energy cannot be sure that it will complete the Tender Offers or, if it does, on what terms it will complete the Tender Offers. Forward-looking statements are based on current beliefs and expectations and are subject to inherent risks and uncertainties, including those discussed under the caption “Forward-Looking Statements” in the Offer to Purchase. The forward-looking statements speak only as of the date of release, and Xcel Energy is under no obligation to, and expressly disclaims any such obligation to update or alter its forward-looking statements, whether as the result of new information, future events or otherwise, except as may be required by law.

View source version on businesswire.com: https://www.businesswire.com/news/home/20241216097890/en/

For more information, contact:

Paul Johnson, Vice President, Treasury & Investor Relations (612) 215-4535

Roopesh Aggarwal, Senior Director - Investor Relations (303) 571-2855

Source: Xcel Energy

FAQ

What is the aggregate tender cap for XEL's bond buyback program?

Initially set at $110,000,000, with Xcel Energy announcing plans to increase the cap based on U.S. Treasury Reference Security pricing.

How much of XEL's 2051 bonds were tendered in the early period?

$440,456,000 principal amount of the 2.60% First Mortgage Bonds due 2051 were tendered out of $700,000,000 outstanding.

When is the settlement date for XEL's early tender offers?

The settlement date for accepted bonds is expected to be December 18, 2024.

What is the early tender payment offered by XEL in the bond buyback?

XEL is offering an early tender payment of $30 per $1,000 principal amount of bonds validly tendered and accepted for purchase.

When does XEL's tender offer expire?

The tender offer expires at 5:00 p.m., New York City time, on December 31, 2024, unless extended or earlier terminated.