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Pembina lifts 5.75% five-year rate reset preferreds to C$250 million
By Susanna Moon
Chicago, April 27 – Pembina Pipeline sold an upsized C$250 million of 5.75% cumulative redeemable minimum rate reset preference shares.
In all, the company sold 10 million of the preference shares, according to a company announcement.
As announced April 18, Pembina priced C$150 million of the rate reset preferreds with a 5.75% annual dividend for the initial period to but excluding June 1, 2021.
At the time, the company had sold 6 million shares of the series 13 class A preferred stock at C$25.00 per share.
The deal included 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.
As reported, 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 receive quarterly floating-rate cumulative dividends at a rate equal to the then 90-day Government of Canada treasury bill rate plus 496 bps.
Proceeds will be used for capital expenditures and working capital requirements in connection with the company’s 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.
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