Dominion Energy Announces Pricing of Equity Units

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Jun 12, 2019, 08:30 ET

RICHMOND, Va., June 12, 2019 /PRNewswire/ -- Dominion Energy (NYSE: D) today announced that it has priced its offering of 14,000,000 2019 Series A Equity Units, initially consisting of 14,000,000 2019 Series A Corporate Units. Dominion Energy has granted to the underwriters an option to purchase up to an additional 2,100,000 Corporate Units to cover over-allotments. Dominion Energy increased the size of the offering to 14,000,000 Corporate Units from 12,500,000 Corporate Units.

Each Corporate Unit consists of a contract to purchase shares of Dominion Energy common stock (the Common Stock) in the future and a 1/10 undivided beneficial ownership interest in one share of Dominion Energy 1.75% Series A Cumulative Perpetual Convertible Preferred Stock with a liquidation preference of $1,000 per share (the Convertible Preferred Stock). Total annual distributions on the Corporate Units will be 7.25%, consisting of the contract adjustment payments and dividends described below.

The Common Stock purchase contracts are expected to settle on June 1, 2022 (subject to early settlement in certain circumstances) for a number of shares of Common Stock per purchase contract equal to $100 divided by the market value of the Common Stock determined during a period prior to settlement, but not to exceed 1.3529 shares (which is approximately equal to $100 divided by the closing price of the Common Stock on June 11, 2019). Quarterly contract adjustment payments equivalent to 5.50% per year will be made on the stated amount of $100 per Equity Unit, subject to Dominion Energy's right to defer such payments.

Dominion Energy initially will pay cumulative dividends on the Convertible Preferred Stock, when, as, and if declared by its board of directors, quarterly in arrears at a rate of 1.75% per year on the $1,000 liquidation preference per share of Convertible Preferred Stock.

Dominion Energy may pay the contract adjustment payments and dividend payments in cash, shares of Common Stock or a combination of cash and shares of Common Stock, at its election.

The Convertible Preferred Stock will have an initial conversion rate of 11.2750 shares of the Common Stock per share of the Convertible Preferred Stock, equivalent to an initial conversion price of approximately $88.69, subject to adjustment. The initial conversion price represents a premium of approximately 20% above the closing price of the Common Stock on June 11, 2019. Each share of Convertible Preferred Stock may be converted only after being separated from the Corporate Units and, prior to June 1, 2022, only upon the occurrence of certain fundamental change events. Upon any such conversion, Dominion Energy will, at its election, pay or deliver, as the case may be, cash, shares of Common Stock, or a combination of cash and shares of Common Stock.

The Convertible Preferred Stock is expected to be remarketed during either an optional remarketing period beginning on and including Feb. 25, 2022 and ending on and including May 13, 2022 or a final remarketing period beginning on and including May 23, 2022 and ending on and including May 27, 2022. Upon any successful remarketing, the conversion rate and/or the dividend rate of the Convertible Preferred Stock may be increased. If no successful remarketing has occurred on or prior to the last day of the final remarketing period, holders of Corporate Units will receive the above-described number of shares of Common Stock per purchase contract upon automatic delivery to Dominion Energy of their corresponding shares of Convertible Preferred Stock (unless a holder elects to settle the purchase contract with separate cash).

The Convertible Preferred Stock has no maturity or mandatory redemption date, but Dominion Energy has the right to redeem all of or any portion of the outstanding Convertible Preferred Stock from and after Sept. 1, 2022 at a redemption price equal to 100% of the liquidation preference thereof, plus any accumulated and unpaid dividends.

Dominion Energy intends to use the net proceeds from this offering, which are expected to be $1,374,800,000 in the aggregate, or $1,581,020,000 in the aggregate if the over-allotment option is exercised in full (in each case, after deducting underwriting discounts and commissions but before deducting other offering expenses), for general corporate purposes and to repay short-term debt.

Goldman Sachs & Co. LLC, Barclays Capital Inc., BNP Paribas Securities Corp., Wells Fargo Securities, LLC, Citigroup Global Markets Inc., Mizuho Securities USA LLC, Morgan Stanley & Co. LLC and SunTrust Robinson Humphrey, Inc. are acting as joint book-running managers for this offering.

The offering is being made pursuant to an effective registration statement filed with the U.S. Securities and Exchange Commission. This news release does not constitute an offer to sell or a solicitation of an offer to buy the securities described herein, 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 law of any such jurisdiction. Any offers of the securities will be made exclusively by means of a prospectus supplement and accompanying prospectus. Copies of these documents may be obtained by contacting Goldman Sachs & Co. LLC, Attn: Prospectus Department, 200 West Street, New York, NY 10282, by phone at (866) 471-2526 or by email at [email protected]; Barclays Capital Inc., Attn: Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717, by phone at (888) 603-5847 or by email at [email protected]; BNP Paribas Securities Corp., Attn: Equity Syndicate, 787 Seventh Avenue, New York, NY 10019, by phone at 1-888-860-5378 or by email at [email protected]; or Wells Fargo Securities, LLC, Attn: Equity Syndicate Department, 375 Park Avenue, New York, NY 10152, by phone at (800) 326-5897 or by email at [email protected].

About Dominion Energy
Nearly 7.5 million customers in 18 states energize their homes and businesses with electricity or natural gas from Dominion Energy (NYSE: D), headquartered in Richmond, Va. The company is committed to sustainable, reliable, affordable and safe energy and is one of the nation's largest producers and transporters of energy with about $100 billion of assets providing electric generation, transmission and distribution, as well as natural gas storage, transmission, distribution and import/export services. The company expects to cut generating fleet carbon dioxide emissions 80 percent by 2050 and reduce methane emissions from its gas assets 50 percent by 2030.

This release contains certain forward-looking statements that are subject to various risks and uncertainties. Factors that could cause actual results to differ from those in the forward-looking statements may accompany the statements themselves. In addition, our business and any offering may be influenced by many factors that are difficult to predict, involve uncertainties that may materially affect actual results and are often beyond our ability to control. These factors include, but are not limited to, the prevailing conditions in the public capital markets, interest rates, economic, political and market factors affecting trading volumes, securities prices or demand for our equity and debt securities. We have identified and will in the future identify a number of additional generally applicable factors in our reports on Forms 10-K and 10-Q filed with the U.S. Securities and Exchange Commission. We refer you to those discussions for further information.

Forward-looking statements in this release are based on information available as of the date of this release, which such information is subject to change at any time. Dominion Energy undertakes no obligation to update any forward-looking statement to reflect developments after the statement is made.

SOURCE Dominion Energy