By Cristal Cody
Tupelo, Miss., Jan. 6 – Pembina Pipeline said in a news release on Wednesday that it priced C$150 million of cumulative redeemable minimum rate reset preference shares with a 5.75% annual dividend for the initial period to but excluding March 1, 2021.
The company sold 6 million shares of the series 11 class A preference shares at C$25.00 per share.
The deal includes an over-allotment option of 2 million shares.
Scotia Capital Inc., BMO Capital Markets Corp. and RBC Capital Markets (Canada) Ltd. were the lead managers.
The dividend rate will reset on March 1, 2021 and every five years thereafter at a rate equal to the then five-year Government of Canada bond yield plus 500 basis points, and in any event, not less than the government bond yield plus 575 bps.
The series 11 shares are redeemable by Pembina on March 1, 2021 and on March 1 of every fifth year thereafter at a price of C$25.00 per share, plus accrued and unpaid dividends.
Series 11 preferred shareholders will have the right to convert their shares into series 12 cumulative redeemable floating-rate class A preferred shares on March 1, 2021 and on March 1 of every fifth year thereafter.
The holders of series 12 preferred shares will be entitled to receive quarterly floating-rate cumulative dividends at a rate equal to the then 90-day Government of Canada treasury bill rate plus 500 bps.
Pembina Pipeline intends to use the proceeds from the offering to reduce debt under its credit facilities, as well as for capital expenditures and working capital requirements in connection with its 2016 capital program.
The Calgary, Alta.-based transportation and midstream service provider serves the North American energy industry.
| Issuer: | Pembina Pipeline Corp.
|
| Amount: | C$150 million, 6 million shares
|
| Greenshoe: | C$50 million, 2 million shares
|
| Maturity: | Up to but excluding March 1, 2021
|
| Securities: | Cumulative redeemable minimum rate reset class A preference shares
|
| Bookrunners: | Scotia Capital Inc., BMO Capital Markets Corp., RBC Capital Markets (Canada) Ltd.
|
| Dividend: | 5.75%; resets March 1, 2021 and every five years thereafter at then five-year Government of Canada bond yield plus 500 bps, and in any event, not less than the government bond yield plus 575 bps
|
| Price: | C$25.00 per share
|
| Call feature: | March 1, 2021 and March 1 of every fifth year thereafter at C$25.00 per share plus accrued and unpaid dividends
|
| Pricing date: | Jan. 6
|
| Settlement date: | Jan. 15
|
| Ratings: | Standard & Poor’s: P-3
|
| DBRS: Pfd-3
|
| Distribution: | Canada
|
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