Algonquin Power holders exchange all 6.65%, 6.2% convertibles in offer

By Susanna Moon

Chicago, Oct. 27 - Algonquin Power & Utilities Corp. and Algonquin Power Income Fund said they closed the exchange offers for the fund's 6.65% convertible unsecured subordinated debentures due July 31, 2011 and 6.2% convertible unsecured subordinated debentures due Nov. 30, 2016.

Under the exchange offers, all C$84,964,000 principal amount of the fund's 6.65% convertibles have been exchanged for C$66,942,750 principal amount of Algonquin Power & Utilities' 7.5% convertible unsecured subordinated debentures due Nov. 30, 2014 and 6,607,027 common shares.

Also, all C$59,967,000 principal amount of the fund's 6.2% convertibles have been exchanged for C$59,967,000 principal amount of Algonquin Power & Utilities' 6.35% convertible unsecured subordinated debentures due Nov. 30, 2016.

Unitholders also exchanged all of the issued and outstanding fund trust units on a one-for-one basis for a new class of common shares.

"The completion of the transactions contemplated by the exchange offers represent an important step in the fund's re-orientation as a dividend paying, growth focused corporation aggressively competing within its clearly defined business sectors," David Kerr, a senior manager with the fund, said in a press release.

On June 12, the trustees of Algonquin Power Income fund announced that the fund would begin an exchange offer for the convertibles.

In connection with the offer, the trustees said they entered into a unit-share exchange support agreement to provide the fund's unitholders the opportunity to exchange their trust units, on a one-for-one basis, for the common shares of Algonquin Power Inc.

In exchange for each C$100 of the 6.65% convertibles, holders were to receive - at their option - either of the following:

• 31.152 common shares in Algonquin Power Inc.; or

• A C$105 7.5% convertible debenture due Nov. 30, 2014 issued by Algonquin Power Inc. with a conversion price of C$4.08 per share.

The conversion price for the 6.65% convertibles is C$10.65 for fund trust units.

In exchange for each C$100 of the 6.2% convertibles, holders were to receive a C$100 6.35% convertible debenture due Nov. 30, 2016 issued by Algonquin Power Inc. with a conversion price of C$6.00 per share.

The conversion price for the 6.2% convertibles is C$11.00 for fund trust units.

The fund also planned to pay accrued interest.

Algonquin is an Oakville, Ont.-based investment trust that owns and has interests in power-generating and infrastructure assets. It is the sole beneficiary of Algonquin Power Trust.

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