By Cristal Cody
Tupelo, Miss., March 31 – Pembina Pipeline Corp. announced on Tuesday that it priced C$200 million of cumulative redeemable rate reset class A preferred shares with a 4.75% dividend for the initial fixed-rate period to but excluding Dec. 1, 2020.
The company sold 8 million shares of the series 9 preferred stock (/P-3/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. and RBC Dominion Securities Inc. were the lead managers.
The dividend will reset on Dec. 1, 2020 and every five years thereafter at a rate equal to the sum of the then five-year Government of Canada bond yield plus 391 basis points.
The series 9 preferred shares are redeemable by Pembina on Dec. 1, 2020 and on Dec. 1 of every following fifth year at C$25.00 per share, plus accrued and unpaid dividends.
Series 9 preferred shareholders will have the right to convert their shares into series 10 cumulative redeemable floating-rate class A preferred shares on Dec. 1, 2020 and on Dec. 1 of every fifth year thereafter. Series 10 preferred shareholders 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 391 bps.
Pembina Pipeline plans to use the proceeds from the offering to reduce debt under the company’s credit facilities.
The Calgary, Alta.-based company is a transportation and midstream service provider that serves the North American energy industry.
| Issuer: | Pembina Pipeline Corp.
|
| Amount: | C$200 million, 8 million shares
|
| Greenshoe: | C$50 million, 2 million shares
|
| Maturity: | Up to but excluding Dec. 1, 2020 (initial period)
|
| Securities: | Cumulative redeemable rate reset class A preferred shares
|
| Bookrunners: | Scotia Capital Inc., RBC Dominion Securities Inc.
|
| Dividend: | 4.75%; resets Dec. 1, 2020 and every five years thereafter at then five-year Government of Canada bond yield plus 391 bps
|
| Price: | C$25.00 per share
|
| Call feature: | Dec. 1, 2020 and Dec. 1 of every fifth year thereafter
|
| Pricing date: | March 31
|
| Settlement date: | April 10
|
| Ratings: | Standard & Poor’s: P-3
|
| DBRS: Pfd-3
|
| Distribution: | Canada
|
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