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Dominion Announces Pricing Of Equity Units

Stocks in this article: D

RICHMOND, Va., June 4, 2013 /PRNewswire/ -- Dominion (NYSE: D) announced today that it has priced its offerings of 10 million 2013 Series A equity units and 10 million 2013 Series B equity units. Each 2013 Series A equity unit will be issued in a stated amount of $50 ( $500 million aggregate stated amount) and will consist of a contract to purchase common stock in the future and a 1/20 undivided beneficial ownership interest in Dominion's 2013 Series A 1.07% remarketable subordinated notes due 2021 having a principal amount of $1,000. The 2013 Series A equity units are subject to remarketing to commence no earlier than December 30, 2015. Each 2013 Series B equity unit will be issued in a stated amount of $50 ( $500 million aggregate stated amount) and will consist of a contract to purchase common stock in the future and a 1/20 undivided beneficial ownership interest in Dominion's 2013 Series B 1.18% remarketable subordinated notes due 2019 having a principal amount of $1,000. The 2013 Series B equity units are subject to remarketing to commence no earlier than March 30, 2016. The offerings are expected to close on June 7, 2013, subject to customary closing conditions.

Total annual distribution on the 2013 Series A equity units will be at the rate of 6.125 percent, consisting of interest on the 2013 Series A remarketable subordinated notes at a rate of 1.07 percent and payments under the related stock purchase contracts at a rate of 5.055 percent.  The reference price for the 2013 Series A equity units is $55.55 per share. The threshold appreciation price for the 2013 Series A equity units is $65.2742 per share, which represents a premium of approximately 17.5 percent over the reference price.  Under the purchase contract, holders are required to purchase a variable number of shares of Dominion common stock no later than April 1, 2016.

Total annual distribution on the 2013 Series B equity units will be at the rate of 6.00 percent, consisting of interest on the 2013 Series B remarketable subordinated notes at a rate of 1.18 percent and payments under the related stock purchase contracts at a rate of 4.82 percent.  The reference price for the 2013 Series B equity units is $55.55 per share. The threshold appreciation price for the 2013 Series B equity units is $65.2742 per share, which represents a premium of approximately 17.5 percent over the reference price. Under the purchase contract, holders are required to purchase a variable number of shares of Dominion common stock no later than July 1, 2016. 

Dominion has granted the underwriters an option to purchase during the 13-day period beginning on, and including, the initial issuance date of each series of the equity units up to 1 million additional equity units per series, or an additional aggregate stated amount of $50 million per series.

Dominion intends to use the net proceeds from these offerings, which are expected to be $970 million in the aggregate or $1,067 million 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 fund its growth plan, including the Cove Point liquefaction project.

BofA Merrill Lynch, Goldman, Sachs & Co., J.P. Morgan Securities LLC and UBS Securities LLC are acting as joint book-running managers for the offerings.

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