By Cristal Cody
Tupelo, Miss., Sept. 2 – Pembina Pipeline Corp. announced on Tuesday that it priced C$150 million of cumulative redeemable rate reset class A preferred shares with a 4.5% annual dividend for the initial fixed-rate period up to but excluding Dec. 1, 2019.
The company sold 6 million shares of the series 7 preferred stock (DBRS: Pfd-3) at C$25.00 per share.
The deal includes an over-allotment option of C$50 million, or 2 million shares.
Scotia Capital Inc., RBC Dominion Securities Inc., BMO Nesbitt Burns Inc., CIBC World Markets Inc., TD Securities Inc. and National Bank Financial Inc. were the underwriters.
The dividend will reset on Dec. 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 294 basis points.
Pembina may redeem the preferred shares on Dec. 1, 2019 and on Dec. 1 of every following fifth year at C$25.00 per share plus accrued and unpaid dividends.
Series 7 holders will have the right to convert their shares into series 8 cumulative redeemable floating-rate class A preferred shares on Dec. 1, 2019 and on Dec. 1 of every fifth year thereafter.
The holders of series 8 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 294 bps.
Proceeds from the offering will be used to fund a portion of Pembina’s proposed $650 million U.S. dollar-denominated purchase of the Vantage pipeline system and the Saskatchewan Ethane Extraction Plant from Mistral Midstream Inc. and other entities controlled by Riverstone Holdings LLC, as well as to fund a portion of the remainder of the company’s 2014 capital expenditure program and for general corporate purposes.
The energy transportation and midstream service provider is based in Calgary, Alta.
| Issuer: | Pembina Pipeline Corp.
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| Amount: | C$150 million, 6 million shares
|
| Greenshoe: | C$50 million, 2 million shares
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| Maturity: | Up to but excluding Dec. 1, 2019
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| Securities: | Cumulative redeemable rate reset class A preferred shares
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| Underwriters: | Scotia Capital Inc., RBC Dominion Securities Inc., BMO Nesbitt Burns Inc., CIBC World Markets Inc., TD Securities Inc. and National Bank Financial Inc.
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| Dividend: | 4.5%; resets to a rate equal to the sum of the then five-year Government of Canada bond yield plus 294 bps
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| Price: | C$25.00 per share
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| Call feature: | Dec. 1, 2019 and on Dec. 1 of every following fifth year at C$25.00 per share plus accrued and unpaid dividends
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| Pricing date: | Sept. 2
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| Settlement date: | Sept. 11
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| Rating: | DBRS: Pfd-3
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| Distribution: | Canada
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