New York and Calgary, May 30, 2003 KeySpan Corporation (NYSE:KSE) and KeySpan
Facilities Income Fund (“the Fund”) announced today the successful completion of the public
offering of 15,000,000 units of the Fund at a price of $10.00 per unit, for gross total proceeds
of CDN$150 million. The proceeds of the offering were used to acquire a 34.49% interest in
the business of KeySpan Energy Canada Partnership (“KeySpan Canada”) from KeySpan
Corporation. Units of the Fund will commence trading on The Toronto Stock Exchange today
under the symbol KEY.UN.
The units are expected to provide a cash-on-cash yield of 10.9% annually paid through
monthly distributions. The first monthly distribution is expected to be paid on July 15.
The Fund has granted the underwriters an option to purchase up to an additional 2,000,000
units at the offering price for a period of 30 days following the closing to cover over-allotments,
if any, and for market stabilization purposes. KeySpan Corporation will retain a 65.51%
ownership interest in KeySpan Canada unless the over-allotment option is exercised. If the
over-allotment option is exercised in full, KeySpan Corporation will receive additional gross
proceeds of CDN$20 million and will then own 60.91% of KeySpan Canada with the Fund
owning 39.09%.
KeySpan Corporation will receive total proceeds of approximately CDN$259.4 million,
consisting of net proceeds of approximately CDN$139.4 million from the offering as well as
CDN$120 million drawn under a new credit facility. Proceeds will be used to repay existing
credit facilities of approximately CDN$215 million.
“We are very pleased with the strong interest shown by the market in our business,” said Jim
Bertram, KeySpan Facilities Income Fund President and CEO. “This positions us well to take
advantage of the many opportunities in our industry created, in part, from the strong natural
gas industry fundamentals.”
“This offering is consistent with our strategy of maximizing value for our shareholders while
demonstrating our ongoing commitment to monetize our non-core assets and focus on
growing our core businesses. The strong response to this offering demonstrates the value of
the assets underlying the Fund,” said Robert B. Catell, Chairman and CEO of KeySpan.
“KeySpan intends to use the balance of the proceeds it receives from this transaction to pay
down debt and further strengthen its balance sheet. In addition, the Income Fund vehicle also
provides for monthly cash payments to KeySpan as well as its other unit holders.”
About KeySpan Facilities Income Fund
Each Unit of the Fund will represent an indirect ownership interest in the business of KeySpan
Canada. KeySpan Canada operates one of the largest natural gas midstream businesses in
Canada. Its business consists of both natural gas gathering and processing as well as the
processing, transportation, storage and marketing of natural gas liquids (NGLs). KeySpan
Canada’s 13 gas processing plants and associated facilities are strategically located in the
west central and foothills natural gas production areas of the Western Canadian Sedimentary
Basin in Alberta. They are pipeline-connected and offer a wide range of flexible services.
KeySpan Canada's NGL infrastructure consists of pipelines, processing and storage in
Edmonton and Fort Saskatchewan, Alberta, a major North American NGL hub.
About KeySpan Corporation
A member of the Standard & Poor’s 500 Index, KeySpan Corporation (NYSE: KSE) is the
largest distributor of natural gas in the Northeast with 2.5 million customers, operating regulated
natural gas utilities in New York, Massachusetts and New Hampshire under the KeySpan
Energy Delivery service company. This customer focused business is complemented by the
Energy Services business which offers a portfolio of energy-related products, services and
solutions to homes and businesses under the KeySpan Home Energy Services and KeySpan
Business Solutions companies.
KeySpan is also the largest investor owned electric generator in New York State. We own
approximately 6,400 Mw of generating capacity, which provides power to 1.1 million LIPA
customers on Long Island and supplies 25% of New York City’s capacity needs. In addition to
these assets, KeySpan has strategic investments in natural gas exploration, production,
pipeline transportation, distribution and storage, and Canadian gas processing.
KeySpan has headquarters in Brooklyn, Boston and Long Island and 12,000 employees. For
more detailed financial and strategic information, please visit our Investor Relations web page
at http://investor.keyspanenergy.com.
The trust units offered have not and will not be registered under the United States Securities
Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not
be offered or sold in the United States except in certain transactions exempt from the
registration requirements of the U.S. Securities Act and applicable states securities laws. The
offer was made in Canada only pursuant to a prospectus.
This press release contains statements about the estimated yield and distributions on the trust
units, the estimated closing date and listing of the trust units and other future events which
constitute forward-looking statements. Forward-looking statements involve known and
unknown risks, uncertainties and other factors that could cause actual results, performance,
achievements or industry results to differ materially from any future results, performance or
achievements expressed or implied by such forward-looking statements. These risks,
uncertainties and other factors include, among others, those discussed in more detail under
the heading “Risk Factors” in the final prospectus filed with the securities regulatory authorities
throughout Canada.
For further information about KeySpan Facilities Income Fund, please visit our website at
www.keyspancanada.com or contact:
David G. Smith, Senior Vice President and Chief Financial Officer, E-mail:
David_Smith@keyspancanada.com Telephone (403) 205-7604 Toll
Free: (888) 699-4853 Facsimile: (403) 205-8303
John Cobb, Director, Investor Relations, E-mail: John_Cobb@keyspancanada.com
Telephone (403) 205-7673 Toll Free: (888) 699-4853 Facsimile: (403)
205-8303
