20130920Decision Memo.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
COMMISSIONER REDFORD
COMMISSIONER SMITH
COMMISSION SECRETARY
LEGAL
WORKING FILE
FROM:TERRI CARLOCK
DATE:SEPTEMBER 18,2013
RE:INTERMOUNTAIN GAS COMPANY’S REQUEST TO ISSUE AND SELL UP
TO $50 MILLION UNSECURED DEBT -CASE NO.INT-G-13-06.
On August 29,2013,Intermountain Gas Company (Inteimountain,Company)filed an
Application requesting authority to issue and sell S50,000,000 of unsecured debt securities.The
proposed issuance will be directly placed in two tranches with the Teachers Insurance and Annuity
Association of American.
It is anticipated that the two tranches will be $25 million each with one term being twelve
(12)years and the other term being fifteen (15)years.The interest rate will be set at the time of
issuance based on ten (10)year Treasury rates plus a basis point adder of approximately 140-145
for the twelve-year issuance and approximately 165-170 for the fifteen-year issuance.
Net proceeds from the sale of the unsecured notes wiLl be used to repay any remaining
amounts outstanding on the Company’s Revolving Credit Agreement;provide for capital
expenditures on its facilities;provide working capital;and for general corporate purposes.The
issuance of debt will also better balance the capital structure ratios prior to changing base rates in
the next general rate case.
The required securities fees have been submitted.
STAFF RECOMMENDATION
Staff recommends approval of the requested $50 million in unsecured debt authority.
Staff also recommends that all final debt and pricing documents be tiled with the
Commission.
DECISION MEMORANDUM 1 SEPTEMBER 18,2013
COMMISSION DECISION
Does the Commission approve the requested $50 million unsecured debt authority with the
reporting requirements?
ji
Tern Carlock
TOintgI3.06 50MDM9lS I)
DECISION MEMORANDUM 2 SEPTEMBER 18,2013