PHI SELLS $1.35 BILLION OF UNSECURED NOTES
Wednesday, September 04, 2002
For Immediate Release
Pepco Holdings, Inc. (NYSE:POM) yesterday entered into an agreement tosell $1.35 billion of unsecured notes: $350 million of 5.50 percent notesdue Aug. 15, 2007, $750 million of 6.45 percent notes due Aug. 15, 2012,and $250 million of 7.45 percent notes due Aug. 15, 2032. The notes willbe unsecured and will rank equally with all of PHI''s unsecured and unsubordinatedindebtedness. The notes due 2007 will be offered to investors at a priceof 99.880 percent, the notes due 2012 will be offered to investors ata price of 99.737 percent, and the notes due 2032 will be offered to investorsat a price of 99.757 percent. PHI is offering the notes in an unregisteredtransaction that is expected to close on Sept. 6, 2002.
The proceeds from the sale of the notes will be used to repay approximately$1.1 billion of indebtedness outstanding under a short-term credit facilityentered into in connection with the Aug. 1 merger of Potomac ElectricPower Company and Conectiv into PHI and to repay approximately $240 millionof PHI''s outstanding commercial paper, including approximately $106.1million of commercial paper to be issued today to fund the settlementof treasury lock transactions entered into in June 2002 in anticipationof the offering of the notes. Approximately $100 million of the settlementcost, which is currently deferred as an offset to PHI''s shareholders''equity balance, will be amortized over the lives of the related notesfrom equity into interest expense on the consolidated statement of earnings.
Forward-Looking Statements:Except for historical statements and discussions, the statements in thisnews release constitute "forward-looking statements" withinthe meaning of the federal securities laws. These statements contain management''sbeliefs based on information currently available to management and onvarious assumptions concerning future events. Forward-looking statementsare not a guarantee of future performance or events. They are subjectto a number of uncertainties and other factors, many of which are outsidethe company''s control. Factors that could cause actual results to differmaterially from those in the forward-looking statements herein includegeneral economic, business and financing conditions; availability andcost of capital, changes in laws, regulations or regulatory policies,weather conditions; competition; governmental actions; and other presentlyunknown or unforeseen factors. These uncertainties and factors could causeactual results to differ materially from such statements. Pepco Holdings,Inc. disclaims any intention or obligation to update or revise any forward-lookingstatements, whether as a result of new information, future events or otherwise.This information is presented solely to provide additional informationto further understand the results and prospects of Pepco Holdings, Inc.
