AltaGas to Retain MVP as Long-Term Investment; Announces $400 Million Bought Deal Financing

Executive Summary

• AltaGas entered a bought‑deal agreement with CIBC, TD Securities, RBC Capital Markets and Scotiabank to sell 10.1 million common shares for $400 million at $39.65 per share, with an over‑allotment option for up to 1.515 million additional shares (~$60 million).
• The company elected to retain its ownership stakes in the Mountain Valley Pipeline (MVP) Mainline, MVP Boost and MVP Southgate projects, citing stronger long‑term value versus a full monetization.
• Net proceeds will be used for near‑term leverage reduction and to fund future growth; management expects modest EPS accretion ($0.02–$0.05) and improved credit metrics through 2028 as the two expansion projects come online.

Key Details

• Financing Terms
• Shares offered: 10,100,000 common shares
• Offering price: $39.65 per share
• Gross proceeds: $400 million
• Over‑allotment option: up to 1,515,000 additional shares for up to ~$60 million, exercisable ≤30 days post‑closing

• Expected closing date: on or about November 7, 2025

• Use of Proceeds

• Leverage reduction (equivalent to what a full MVP monetization would have achieved)

• Funding of future growth projects, including the upcoming MVP Boost and Southgate expansions

• MVP Retention Rationale

• MVP Boost – Capacity increased by 20 % to 600 MMcf/d; in‑service target mid‑2028 (one year earlier than previously expected); projected ~3× EBITDA build multiple; AltaGas retains 10 % interest with a remaining capital commitment of US$45 million.
• MVP Southgate – Environmental Assessment cleared; anticipated <5.0× EBITDA build multiple; AltaGas holds 5.1 % interest with a remaining capital commitment of ~US$16 million; expected to be in service ahead of Boost.

• MVP Mainline – Continues to exceed financial expectations in 2025, supported by 20‑year take‑or‑pay contracts with investment‑grade utilities.

• Financial Impact Forecast

• EPS accretion relative to a full MVP sale: +$0.02 (2026), +$0.03 (2027), +$0.05 (2028+).

• Anticipated stronger leverage profile and increased investment capacity once Boost and Southgate are operational.

• Regulatory & Market Context

• Both MVP Boost and Southgate projects remain subject to Federal Energy Regulatory Commission (FERC) approvals.
• The pipeline’s performance benefits from growing Appalachian gas production, U.S. LNG export demand, baseload power generation growth, and expanding data‑center electricity needs.

Notable Quotes

• “Retaining MVP is expected to deliver superior value to our shareholders, providing higher normalized EPS and stronger credit metrics than a divestiture would.” – AltaGas management (paraphrased from release).