By Cristal Cody
Tupelo, Miss., Jan. 7 - Pembina Pipeline Corp. said on Tuesday that it priced C$150 million of cumulative redeemable rate-reset class A preferred shares with a 5% dividend for the initial fixed-rate period to but excluding June 1, 2019.
The company sold 6 million shares of the series 5 stock (DBRS: Pfd-3) at C$25.00 per share.
Scotia Capital Inc. and RBC Dominion Securities Inc. were the lead managers.
The deal includes an over-allotment option of 2 million shares for additional proceeds of C$50 million.
The dividend rate will reset on June 1, 2019 and every five years thereafter at a rate equal to the sum of the then five-year Government of Canada bond yield plus 300 basis points.
The series 5 shares are redeemable by Pembina at its option on June 1, 2019 and on June 1 of every fifth year thereafter at a price of C$25.00 per share plus accrued and unpaid dividends.
Series 5 preferred shareholders will have the right to convert their shares into series 6 cumulative redeemable floating-rate class A preferred shares on June 1, 2019 and on June 1 of every fifth year thereafter. The holders of series 6 preferred shares will be entitled to receive quarterly floating-rate cumulative dividends at a rate equal to the sum of the then 90-day Government of Canada Treasury bill rate plus 300 bps.
Pembina Pipeline plans to use the proceeds to partially fund its 2014 capital expenditure program, to reduce debt under its credit facilities and for general corporate purposes.
The company is a Calgary, Alta.-based energy transportation and midstream service provider.
| Issuer: | Pembina Pipeline Corp.
|
| Amount: | C$150 million, 6 million shares
|
| Greenshoe: | C$50 million, 2 million shares
|
| Securities: | Cumulative redeemable rate reset class A preferred shares
|
| Bookrunners: | Scotia Capital Inc. and RBC Dominion Securities Inc.
|
| Dividend: | 5%; resets June 1, 2019 and every five years thereafter at five-year Government of Canada bond yield plus 300 bps
|
| Price: | C$25.00 per share
|
| Call feature: | June 1, 2019 and on June 1 every five years thereafter at par plus accrued dividends
|
| Pricing date: | Jan. 7
|
| Settlement date: | Jan. 16
|
| Rating: | DBRS: Pfd-3
|
| Distribution: | Canada
|
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