Puget Sound Said to Drop Buyback Deal as Investors Withhold Nod

Puget Sound Energy Inc. is scrapping a bond buyback plan after failing to obtain investor support for the transaction, according to two people with knowledge of the matter.

The company hadn’t won over enough investors by the time its extended consent-solicitation period expired earlier this week, the people said, asking not to be identified as the information isn’t public. Puget Sound was trying to retire $250 million of 6.974 percent bonds due in 2067 in an effort to clean up its balance sheet.

The proposed deal had no material impact on the company’s financial standing, Chief Financial Officer Daniel Doyle said. The deal expired June 7 and the company doesn’t intend any further action, Doyle said. Doyle declined to comment on the status of the consents. 

Puget Sound, which was taken private by a unit of Macquarie Group Ltd. in 2009, issued the hybrid securities in 2007 to get favorable treatment from credit-raters determining its leverage metrics. The company provides electric and natural-gas services mainly in the Puget Sound area in Washington state, which is home to companies such as Microsoft Corp., Amazon.com Inc. and Starbucks Corp.

The company was looking to remove variable-rate debt from its balance sheet as the 2067 notes become floating rate next year.

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