Mr. Karl Smith reports

FORTIS INC. ANNOUNCES $300,000,000 BOUGHT DEAL OFFERING OF SERIES M FIRST PREFERENCE SHARES

Fortis Inc. has entered into an agreement with a syndicate of underwriters led by Scotiabank and RBC Capital Markets, pursuant to which the underwriters have agreed to purchase, on a bought-deal basis, from Fortis and sell to the public 12 million cumulative redeemable fixed rate reset first preference shares, Series M, of the corporation. The purchase price of $25.00 per Series M first preference share will result in gross proceeds for Fortis of $300-million.

Fortis has granted the underwriters the option to purchase up to an additional 1.8 million Series M first preference shares to cover overallotments, if any, and for market stabilization purposes, during the 30 days following the closing of the offering. If the overallotment option is exercised in full, the offering will result in gross proceeds to the corporation of $345-million.

The net proceeds of the offering will be used to repay a portion of the amounts borrowed by Fortis under its acquisition credit facility in connection with the acquisition of UNS Energy Corp. completed on Aug. 15, 2014.

The holders of Series M first preference shares will be entitled to receive fixed cumulative preferential cash dividends, if, as and when declared by the board of directors of the corporation, for the initial period commencing on the date of issue and ending on but excluding Dec. 1, 2019, at a rate of 4.10 per cent, in an amount equal to $1.0250 per Series M first preference share per annum paid in equal quarterly instalments. The first of such dividends, if declared, will be payable on Dec. 1, 2014, for the period commencing on the date of issue in the amount of 20.50 cents per Series M first preference share. The dividend rate will be reset on Dec. 1, 2019, and thereafter every five years at a level of 2.48 per cent above the five-year Canadian government bond yield.

At the end of the initial period and every five years thereafter, the holders of Series M first preference shares will, subject to certain conditions and the right of the corporation to redeem those shares, have the option to convert any or all of their Series M first preference shares into an equal number of cumulative redeemable floating-rate first preference shares, Series N, of the corporation. The holders of Series N first preference shares will be entitled to receive floating-rate cumulative preferential cash dividends, if, as and when declared by the board of directors, at the rate of the three-month Canadian government treasury bill average yield plus 2.48 per cent, reset on a quarterly basis.

The offering is subject to the receipt of all necessary regulatory and stock exchange approvals. Closing is expected to occur on or about Sept. 19, 2014, but not later than Oct. 24, 2014.

We seek Safe Harbor.