CHS to issue $200 million more 7.875% cumulative preferreds

By Stephanie N. Rotondo

Phoenix, July 10 – CHS Inc. intends to issue up to $200 million more of its 7.875% class B series 1 cumulative redeemable preferred stock (Nasdaq: CHSCO), according to a registration statement filed with the Securities and Exchange Commission on Thursday.

The company initially sold $250 million of the preferreds on Sept. 19. Dividends are payable on the last day of March, June, September and December.

The preferreds become redeemable on or after Sept. 26, 2023 at par plus accrued dividends.

Proceeds will be used to redeem $200 million of the company’s “patrons’ equities.” A total of 70% of the add-on will be sold to non-individual patrons and the remaining 30% will be issued to individual patrons.

In each case, only “active patrons” – non-individual patrons who have done business with the company in the last five fiscal years and individual patrons who have done at least $20,000 of business with the company in fiscal years 2012 and 2013 combined – will be allowed to participate.

CHS will not receive any cash proceeds from the new issuance but will “make available for business purposes” cash that would have otherwise been used to redeem the patrons’ equities.

CHS is an Inver Grove Heights, Minn.-based integrated agriculture company.

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