Dominion Announces Successful Consent Solicitation
to Remove Trigger Provisions in Dominion Fiber Ventures Notes
RICHMOND, Va. – Dominion (NYSE: D) announced today that the
requisite number of Dominion Fiber Ventures (DFV) note holders have consented
to the removal of the DFV note stock price and credit ratings trigger provisions
("the triggers") and have agreed to tender their notes to Dominion.
The triggers will be removed on all outstanding DFV notes on the effective date
of the consent solicitation and tender offer ("the offer") for the
DFV notes launched by Dominion on Jan. 23, 2003. The effective date of the offer
is expected to be Feb. 21, 2003.
Under the terms of the offer, note holders who tendered their
notes by the 5:00 p.m. ET Feb. 5 deadline will receive a consent fee plus a
tender price. Note holders who did not tender their notes by 5:00 p.m. ET Feb.
5, 2003 have until 9:00 a.m. ET Feb. 21, 2003 to tender and will receive a tender
price, but not a consent fee. Notes that have not been tendered by the Feb.
21 deadline may remain outstanding, but will no longer contain trigger provisions
nor certain other restrictive covenants.
Dominion plans to finance the acquisition of the tendered
notes with an appropriate combination of Dominion Resources term financings
to be issued in the near future. The DFV notes were already treated as Dominion
debt by the rating agencies; therefore, the replacement financing will be neutral
from a leverage standpoint. The removal of the triggers also eliminates perceived
liquidity issues investors had associated with the triggers.
The company will incur about $17 million pre-tax in consent
fees to remove the triggers and approximately $38 million pre-tax related to
the tender and other transaction costs. In addition, the company will recognize
a non-cash charge of about $6 million pre-tax for the write-off of unamortized
costs associated with the tendered DFV notes. All of these costs are expected
to be largely mitigated by savings in interest expense over the next two years
associated with the replacement financing. First quarter earnings will include
a special charge associated with the transaction related costs. The company
reaffirms its 2003 operating earnings guidance of $4.60 to $4.80 per share,
excluding special charges, and 5 percent to 7 percent average annual growth
after 2003.
Credit Suisse First Boston (CSFB) is the Dealer Manager for
the consent solicitation and tender offering and D.F. King is the Information
Agent. Specific questions of note holders should be directed to CSFB's Liability
Management Group at either 800-820-1653 or 212-538-8474. For inquiries of the
Information Agent call 800-848-3416 or 212-269-5550.
Dominion is one of the nation's largest producers of energy,
with a diversified and integrated energy portfolio consisting of 24,000 megawatts
of generation, 6.1 trillion cubic feet equivalent of natural gas reserves, 7,700
miles of natural gas transmission pipeline and more than 960 billion cubic feet
of storage capacity. Dominion also serves 3.9 million franchise natural gas
and electric customers in five states. In addition, Dominion owns a managing
equity interest in Dominion Fiber Ventures LLC, owner of Dominion Telecom.
This release contains forward-looking statements including
our expectations for 2003 earnings and for future annual growth rates that are
subject to various risks and uncertainties. Discussion of factors that could
cause actual results to differ materially from management's projections, forecasts,
estimates and expectations may include factors that are beyond the company's
ability to control or estimate precisely, such as estimates of future market
conditions, estimates of proved and unproved reserves and the behavior of other
market participants. Other factors include, but are not limited to, weather
conditions, economic conditions in the company's service area, fluctuations
in energy-related commodity prices, changes to rating agency requirements, changing
financial accounting standards, trading counterparty credit risks, risks related
to energy trading and marketing, risks associated with successfully executing
the telecommunications business plan and other uncertainties. Other risk factors
are detailed from time to time in the company's Securities & Exchange Commission
filings.
