By Cristal Cody
Eureka Springs, Ark., April 18 – Pembina Pipeline announced on Monday 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 June 1, 2021.
The company sold 6 million shares of the series 13 class A preferred stock at C$25.00 per share.
The deal includes an over-allotment option of C$50 million, or 2 million shares.
RBC Capital Markets (Canada) Ltd. and Scotia Capital Inc. were the lead managers.
The dividend rate will reset on June 1, 2021 and every five years thereafter at a rate equal to the then five-year Government of Canada bond yield plus 496 basis points with a floor of 5.75%.
The preferred shares are redeemable by Pembina on June 1, 2021 and on June 1 of every fifth year thereafter at a price of C$25.00 per share, plus accrued and unpaid dividends.
Series 13 preferred shareholders will have the right to convert their shares into series 14 cumulative redeemable floating-rate class A preferred shares on June 1, 2021 and on June 1 of every fifth year thereafter.
The series 14 holders 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 496 bps.
Pembina Pipeline intends to use the proceeds from the offering for capital expenditures and working capital requirements in connection with its 2016 capital program and to reduce debt under its credit facilities.
The Calgary, Alta.-based transportation and midstream service provider serves the North American energy industry.
| Issuer: | Pembina Pipeline Corp.
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| Amount: | C$150 million, 6 million shares
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| Greenshoe: | C$50 million, 2 million shares
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| Maturity: | Perpetual
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| Securities: | Cumulative redeemable minimum rate reset class A preferred shares
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| Bookrunners: | RBC Capital Markets (Canada) Ltd. and Scotia Capital Inc.
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| Dividend: | 5.75%; resets June 1, 2021 and every five years thereafter at then five-year Government of Canada bond yield plus 496 bps, floor of 5.75%
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| Price: | C$25.00 per share
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| Call feature: | June 1, 2021 and June 1 of every fifth year thereafter at C$25.00 per share plus accrued and unpaid dividends
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| Pricing date: | April 18
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| Settlement date: | April 27
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| Ratings: | Standard & Poor’s: P-3
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| DBRS: Pfd-3
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| Distribution: | Canada
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