By Cristal Cody
Tupelo, Miss., Sept. 2 – Pembina Pipeline Corp. announced on Tuesday that it priced an upsized C$250 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 10 million shares of the series 7 preferred stock (DBRS: Pfd-3) at C$25.00 per share.
The offering was upsized from C$150 million, or 6 million shares.
CIBC World Markets Inc. and Scotia Capital Inc. were the lead managers, according to a company spokesman.
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.
|
| Amount: | C$250 million, 10 million shares
|
| Maturity: | Up to but excluding Dec. 1, 2019
|
| Securities: | Cumulative redeemable rate reset class A preferred shares
|
| Bookrunners: | CIBC World Markets Inc. and Scotia Capital Inc.
|
| Dividend: | 4.5%; resets 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 bps
|
| Price: | C$25.00 per share
|
| 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
|
| Pricing date: | Sept. 2
|
| Settlement date: | Sept. 11
|
| Rating: | DBRS: Pfd-3
|
| Distribution: | Canada
|
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