Hydro Ottawa Completes Financing, Debt to Equity Conversion and Credit Facility

On February 9, 2005, Hydro Ottawa Holding Inc. completed its initial capital markets offering of debt securities, selling $200 million of senior unsecured debentures in a cross-Canada offering. The issuance of the debentures was the final step in a refinancing designed to replace promissory notes owed to the City of Ottawa bearing an above-market, regulated, interest rate with long term capital markets debt.

The transaction included three elements: 1) a $38 million conversion by the City of debt into equity; 2) a new $350 million syndicated credit facility comprised of a 364-day $200 million bridge facility and a three-year $150 million revolving facility; and 3) a $200 million issue of 10-year senior unsecured debentures carrying a 4.93 per cent coupon and rated A (low) by DBRS and A- by S&P. The debenture offering was underwritten by CIBC World Markets and TD Securities. The credit facilities were provided by Canadian Imperial Bank of Commerce and the Toronto-Dominion Bank. Conversion of $38 million of the City-held debt into equity was completed in late December. The $200 million bridge facility was signed and fully drawn in early January and used to repay the remaining debt owed to the City of Ottawa. The proceeds of the debentures were applied to repayment of the bridge facility, which was then cancelled.

Hydro Ottawa was represented by Gowling Lafleur Henderson LLP with a team that included Guy David, Hugh Cowan, Michael Boehm and Monte MacGregor (corporate finance) in Ottawa, Léonard Serafini in Montreal, Henry Harris, Tom Brett, Tim Wach, Bernadette Corpuz and Diane Yu in Toronto, Jeff Dyck in Calgary, and Brett Kagetsu in Vancouver. Paul Hughes, corporate secretary and general counsel of Hydro Ottawa, provided support and direction to the Gowlings team.

The underwriters were represented by Borden Ladner Gervais LLP with a team that included Paul Findlay, Adam Segal and Andrew Peel (corporate/securities), and Linda Bertoldi, James Sidlofsky and Shannon Rattray (corporate/energy) in Toronto, and Lisa Dwyer Hurteau in Ottawa.

The banks were represented by Joel Scoler, Seán O’Neill and Justin Lapedus of McCarthy Tétrault LLP in Toronto.

Lawyer(s)

Brett A. Kagetsu Joel M. Scoler Seán C. O'Neill Hugh R. Cowan James C. Sidlofsky Linda L. Bertoldi Bernadette D. Corpuz Monte T.G. MacGregor Guy David Adam Segal Paul G. Findlay Léonard Serafini Justin A. Lapedus Thomas Brett Michael S. Boehm Henry A. Harris Andrew L. Peel Jeffrey E. Dyck Diane Yu Timothy S. Wach