By Cristal Cody
Prospect News, Jan. 14 - Algonquin Power Co. sold C$200 million of 4.65% senior debentures due Feb. 15, 2022 at 99.864 to yield 4.671% in a Rule 144A private placement offering on Tuesday, according to an informed source.
The debentures (/BBB/DBRS: BBB) priced with a spread of 246.7 basis points over the Government of Canada benchmark.
National Bank Financial Inc. and Scotia Capital Inc. were the lead managers. Co-managers were BMO Capital Markets Corp., CIBC World Markets Inc. and TD Securities Inc.
Concurrent with the offering, Algonquin Power said in a release that it is entering into a cross currency swap to convert the Canadian dollar-denominated debentures into U.S. dollars, which will result in an effective interest rate throughout the term of the debentures of about 4.773%.
Algonquin Power may redeem the notes in whole or in part at its option at the Canada Yield Price plus 57.5 bps.
The power company plans to use the proceeds for uses that include financing the acquisition of the remaining 40% managing ownership interest in three of its U.S. wind farms, to reduce outstanding project debt, to reduce amounts outstanding under its bank credit facility and for general corporate purposes.
Oakville, Ont.-based Algonquin Power, a subsidiary of Algonquin Power & Utilities Corp., owns and operates regulated and non-regulated water, electricity and natural gas utilities in Canada and the United States.
| Issuer: | Algonquin Power Co.
|
| Amount: | C$200 million
|
| Maturity: | Feb. 15, 2022
|
| Securities: | Senior debentures
|
| Bookrunners: | National Bank Financial Inc. and Scotia Capital Inc.
|
| Co-managers: | BMO Capital Markets Corp., CIBC World Markets Inc. and TD Securities Inc.
|
| Coupon: | 4.65%
|
| Price: | 99.864
|
| Yield: | 4.671%
|
| Spread: | 246.7 bps over Government of Canada benchmark
|
| Call feature: | Canada bond yield plus 57.5 bps
|
| Put option: | 101%
|
| Pricing date: | Jan. 14
|
| Settlement date: | Jan. 17
|
| Ratings: Standard & Poor's: BBB
|
| DBRS: BBB
|
| Distribution: | Canada private placement; Rule 144A
|
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