Atlantic Power to repurchase convertibles using discretionary capital

By Susanna Moon

Chicago, Feb. 10 – Atlantic Power Corp. said it will give priority to debt repurchases in using its “discretionary capital.”

The repurchases will be made under the normal course issuer bid begun in December, “with a goal of capturing value arising from compelling price-to-value opportunities in its publicly traded securities,” according to a company press release.

“Our convertible debentures are currently trading at substantial discounts to par, and repurchases at these levels create value for our common shareholders by reducing our cash interest payments, delevering our balance sheet and improving our debt maturity profile,” James J. Moore Jr., the company’s president and chief executive officer, said in the press release.

“We will undertake share repurchases only when the price-to-value ratio is compelling, as it is now. Further debt reduction is an important priority for the company and remains a significant component of our capital allocation strategy. As measured against internal or external equity investment opportunities, however, our own shares currently provide the most attractive returns available to us.”

Atlantic Power said on Dec. 22 that it planned to make a normal-course issuer bid for four series of its convertible subordinated debentures and that Atlantic Power Preferred Equity Ltd. planned to make a normal-course issuer bid for three series of its preferred shares.

The issuer bids were expected to begin Dec. 29 and expire Dec. 28, 2016.

The following securities are covered by the issuer bids:

• C$67.3 million of outstanding 6.25% convertible subordinated debentures due March 15, 2017;

• C$75,839,000 of outstanding 5.6% series B convertible subordinated debentures due June 30, 2017;

• $117 million of outstanding 5.75% series C convertible subordinated debentures due June 30, 2019;

• C$90 million of outstanding 6% series D extendible convertible subordinated debentures due Dec. 31, 2019;

• 5 million outstanding 4.85% cumulative redeemable preferred shares, series 1;

• 2,338,094 outstanding cumulative rate-reset preferred shares, series 2; and

• 1,661,906 outstanding cumulative floating-rate preferred shares, series 3.

Under the issuer bids, the broker for Atlantic Power and Atlantic Power Preferred Equity may purchase up to 10% of the public float of Atlantic Power’s convertible debentures and common shares and up to 5% of the amount issued and outstanding of Atlantic Power Preferred Equity’s preferred shares.

Under its previous issuer bid, Atlantic Power purchased C$150,000 of its 6.25% debentures at an average price of C$87.12, C$4,661,000 of its 5.6% debentures at an average price of C$91.71, $13 million of its 5.75% debentures at an average price of $80.80 and C$10 million of its 6% debentures at an average price of C$82.19.

Dedham, Mass.-based Atlantic Power owns and operates a fleet of power generation assets.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.