Exhibit 1.2
VECTREN UTILITY HOLDINGS, INC.
(an Indiana corporation)
AND THE GUARANTORS NAMED HEREIN
Senior Debt Securities
TERMS AGREEMENT
---------------
July 24, 2003
To: Vectren Utility Holdings, Inc.
20 N.W. Fourth Street
Evansville, Indiana 47741
Ladies and Gentlemen:
We understand that Vectren Utility Holdings, Inc., an Indiana corporation
(the "Company"), proposes to issue and sell $100,000,000 aggregate principal
amount of its 5.25% Senior Notes due 2013 (the "5.25% Senior Notes") and
$100,000,000 aggregate principal amount of its 5.75% Senior Notes due 2018 (the
"5.75% Senior Notes" and, together with the 5.25% Senior Notes, the "Initial
Underwritten Securities"). Subject to the terms of the Indenture, the Initial
Underwritten Securities will be fully and unconditionally guaranteed as to
payment of principal, premium (if any) and interest (the "Guarantees") by
Indiana Gas Company, Inc., Southern Indiana Gas and Electric Company and Vectren
Energy Delivery of Ohio, Inc. (the "Initial Guarantors"). Subject to the terms
and conditions set forth or incorporated by reference herein, we, the
underwriters named below (the "Underwriters"), offer to purchase from the
Company, and the Company agrees to sell to the Underwriters, severally and not
jointly, the principal amount of each series of Initial Underwritten Securities
opposite the names of the Underwriters set forth below at the purchase price set
forth below.
Principal Amount
Underwriter of Initial Underwritten Securities
- ------------------------------------------ ----------------------------------
Principal Principal
Amount of 5.25% Amount of 5.75
Senior Notes Senior % Notes
---------------- ----------------
ABN AMRO Incorporated .................... $ 34,000,000 $ 34,000,000
Banc One Capital Markets, Inc. ........... 34,000,000 34,000,000
Wachovia Capital Markets, LLC ............ 12,000,000 12,000,000
BNY Capital Markets, Inc. ................ 5,000,000 5,000,000
Fifth Third Securities, Inc. ............. 5,000,000 5,000,000
NatCity Investments, Inc. ................ 5,000,000 5,000,000
U.S. Bancorp Piper Jaffray Inc. .......... 5,000,000 5,000,000
---------------- ----------------
Total $ 100,000,000 $ 100,000,000
================ ================
The Initial Underwritten Securities
shall have the following terms, unless
indicated otherwise:
Title: 5.25% Senior Notes due 2013
5.75% Senior Notes due 2018
Rank: Unsecured senior indebtedness
Guarantees: Guaranteed by the Initial Guarantors
Ratings: "Baa1" by Moody's Investors Service, Inc.
"A-" by Standard & Poor's Ratings Services
Aggregate principal amount: 5.25% Senior Notes: $100,000,000
5.75% Senior Notes: $100,000,000
Denominations: $1,000 and integral multiples thereof
Currency of payment: U.S. Dollars
Interest rate or formula: 5.25% Senior Notes: 5.25% per annum
5.75% Senior Notes: 5.75% per annum
Interest payment dates: February 1 and August 1 of each year, commencing
February 1, 2004
Regular record dates: The 15/th/ calendar day of the month immediately
preceding the month in which
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each Interest Payment Date falls
Stated maturity date: 5.25% Senior Notes: August 1, 2013
5.75% Senior Notes: August 1, 2018
Redemption provisions: The Initial Underwritten Securities are redeemable
at any time at the option of the Company in whole
or in part, upon not less than 30 calendar days
and not more than 60 calendar days prior written
notice at a price equal to the greater of (1) 100%
of the principal amount to be redeemed and (2) the
sum of the present values of the remaining
scheduled payments of principal and interest on
the related Initial Underwritten Securities,
discounted to the redemption date on a semi-annual
basis at the Treasury Rate plus 20 basis points,
in the case of the 5.25% Senior Notes, and 25
basis points, in the case of the 5.75% Senior
Notes, plus in each case unpaid interest accrued
to the redemption date.
Sinking fund requirements: The Initial Underwritten Securities will not have
the benefit of, or be subject to, any sinking
fund.
Defeasance provisions: The Initial Underwritten Securities are subject to
defeasance and covenant defeasance as provided in
Article 8 of the Indenture.
Fixed or Variable Price
Offering: 5.25% Senior Notes: 99.746% of the principal
amount, plus accrued interest, if any, from July
29, 2003.
5.75% Senior Notes: 99.177% of the principal
amount, plus accrued interest, if any, from July
29, 2003.
Purchase price: 5.25% Senior Notes: 99.096% of the principal
amount.
5.75% Senior Notes: 98.477% of the principal
amount.
Over-allotment option: None
Form: Book-entry
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Listing: None
Lock-Up Agreements: During the period of 90 days from July 29, 2003
the Company will not sell, offer to sell, grant
any option for the sale of, or otherwise dispose
of any additional Initial Underwritten Securities,
any security convertible into or exchangeable into
or exercisable for Initial Underwritten Securities
or any debt securities substantially similar to
the Initial Underwritten Securities or any
security convertible into, exchangeable into or
exercisable for any such debt securities, without
the prior written consent of the Underwriters.
Other terms and conditions: None
Closing date and location: July 29, 2003 at Sidley Austin Brown & Wood llp,
787 Seventh Avenue, New York, New York 10019.
All of the provisions contained in the document attached as Annex I hereto
entitled "Vectren Utility Holdings, Inc.-- Debt Securities--Underwriting
Agreement" are hereby incorporated by reference in their entirety herein and
shall be deemed to be a part of this Terms Agreement to the same extent as if
such provisions had been set forth in full herein. Terms defined in such
document are used herein as therein defined.
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Please accept this offer on July 24, 2003 by signing a copy of this Terms
Agreement in the space set forth below and returning the signed copy to us.
Very truly yours,
ABN AMRO INCORPORATED
BANC ONE CAPITAL MARKETS, INC.
By: ABN AMRO INCORPORATED
By: /s/ Peter O'Malley
------------------------------------
Authorized Signatory
By: BANC ONE CAPITAL MARKETS, INC.
By: /s/ Robert B. Nordlinger
------------------------------------
Authorized Signatory
As Representatives of the other named
Underwriters.
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Accepted:
VECTREN UTILITY HOLDINGS, INC.,
as Issuer
By: /s/ Jerome A. Benkert, Jr.
------------------------------------
Name: Jerome A. Benkert
Title: Executive Vice President and
Chief Financial Officer
INDIANA GAS COMPANY, INC.,
as Initial Guarantor
By: /s/ William S. Doty
------------------------------------
Name: William S. Doty
Title: President
SOUTHERN INDIANA GAS AND ELECTRIC COMPANY,
as Initial Guarantor
By: /s/ M. Susan Hardwick
------------------------------------
Name: M. Susan Hardwick
Title: Vice President, Controller
VECTREN ENERGY DELIVERY OF OHIO, INC.,
as Initial Guarantor
By: /s/ Niel C. Ellerbrook
------------------------------------
Name: Niel C. Ellerbrook
Title: Chairman and Chief Executive
Officer
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