By Cristal Cody
Tupelo, Miss., Feb. 24 - Algonquin Power & Utilities Corp. sold C$100 million of cumulative rate reset preferred shares to yield a 5% dividend for the initial fixed-rate period ending March 31, 2019, according to the company on Monday.
The utility sold 4 million shares of the series D preferred stock (DBRS: Pfd-3) at C$25.00 per share.
CIBC World Markets Inc. and TD Securities Inc. were the lead managers.
The dividend rate will reset on March 31, 2019 and every five years thereafter at a rate equal to the then five-year Government of Canada bond yield plus 328 basis points.
The series D preferreds are callable on March 31, 2019 and on March 31 of every five years thereafter.
Series D holders will have the option to convert all or any of their shares into series E cumulative floating-rate preferred shares on March 31, 2019 and on March 31 every five years thereafter. Series E shareholders will be entitled to receive quarterly floating-rate cumulative preferential cash dividends at a rate equal to the sum of the then 90-day Government of Canada treasury bill rate plus 328 bps.
Algonquin Power plans to use the proceeds from the deal to partially finance certain previously disclosed growth opportunities, to reduce amounts outstanding on its credit facilities and for general corporate purposes.
Oakville, Ont.-based Algonquin Power owns and operates regulated and non-regulated water, electricity and natural gas utilities in North America.
| Issuer: | Algonquin Power & Utilities Corp.
|
| Amount: | C$100 million
|
| Maturity: | March 31, 2019
|
| Securities: | Cumulative rate reset preferred shares
|
| Bookrunners: | CIBC World Markets Inc., TD Securities Inc.
|
| Dividend: | 5%; resets on March 31, 2019 and every five years thereafter at the then five-year Government of Canada bond yield plus 328 bps
|
| Price: | C$25.00 per share
|
| Call feature: | March 31, 2019 and on March 31 of every fifth year thereafter
|
| Pricing date: | Feb. 24
|
| Settlement date: | March 5
|
| Rating: | DBRS: Pfd-3
|
| Distribution: | Canada
|
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