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Financing for Maritimes & Northeast in Place

Financing for Maritimes & Northeast in Place

Duke Energy in conjunction with affiliates of Westcoast Energy Inc., Mobil Corporation and NS Power Holdings Inc. recently completed the project financing for the U.S. and Canadian portions of the Maritimes & Northeast Pipeline project.

"The innovative non-recourse financing package has been put in place with a combination of bank loans and bond offerings in the United States and Canada," said David Hauser, senior vice president and treasurer of Duke Energy. "Duke Energy will continue to look at other innovative financing structures for upcoming projects."

Total debt financing was about $521 million in the United States and about C$712 million in Canada. The package includes agreements to repay the bank loans within the first 10 years while the bonds will be repaid in years 11 through 20 of pipeline operations.

Proceeds will be used by the U.S. company and the Canadian company building the U.S. and the Canadian portions of the Maritimes & Northeast Pipeline for the construction, financing and operation of their respective portions of the pipeline.

The bonds were rated A1 by Moody's Investors Service and A by Standard & Poor's.

Maritimes & Northeast is a 658-mile pipeline traversing areas of Nova Scotia, New Brunswick, Maine and New Hampshire before interconnecting with the North American pipeline grid in Massachusetts. The pipeline will transport gas from the Sable Offshore Energy Project on the Scotian Shelf, which has been estimated to have reserves of about 3.7 Tcf. The National Energy Board of Canada estimates total resources of about 18 Tcf on the Scotian Shelf. The two Maritimes & Northeast companies that are building the Canadian and U.S. portions of the pipelines are each owned by affiliates of Duke Energy (37.5%), Westcoast Energy Inc. (37.5%), Mobil Corp. (12.5%) and NS Power Holdings Inc. (12.5%).

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