Algonquin sets Feb. 2 deadline for final installment on convertibles

By Angela McDaniels

Tacoma, Wash., Jan. 3 – Algonquin Power & Utilities Corp. said the final installments on its C$1 billion 5% convertible subordinated debentures due 2026 are due Feb. 2.

The convertibles were sold in February 2016 on an installment basis at a price of C$1,000 each. The first installment of C$333 was payable at closing on March 1, 2016. The final installment of C$667 has become payable now that subsidiary Liberty Utilities (Central) Co. has acquired Empire District Electric Co.

Holders will receive accrued interest of C$6.8493 per C$1,000 principal amount of debentures. Those who have paid the final installment by Feb. 2 will also receive a make-whole payment of C$3.6986 per C$1,000 principal amount of debentures, representing the interest that would have accrued from the day following the final installment date to and including March 1.

Following Feb. 2, holders of fully paid debentures will have the right to convert their debentures into Algonquin common shares at a conversion price of C$10.60 per share. The company’s shares closed at C$11.39 (Toronto: AGN) on Friday.

On the day following the final installment date, the interest rate on the debentures will fall to zero. Based on the first installment of C$333 per C$1,000 principal amount, the effective annual yield to and including the final installment date is 15%, and the effective annual yield thereafter is zero.

Liberty Utilities paid about C$3.2 billion for Empire District Electric.

Algonquin is a generation, transmission and distribution utility based in Oakville, Ont.

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