Algonquin Power & Utilities to redeem all 6.35% convertibles due 2016

By Tali David

Minneapolis, Jan. 20 - Algonquin Power & Utilities Corp. plans to redeem its series 2A 6.35% convertible subordinated debentures due Nov. 30, 2016, according to a press release.

The convertibles will be redeemed on Feb. 24.

The company will pay the redemption amount in shares. In total, it will issue a number of shares equal to the outstanding principal amount of the convertibles, currently C$59,957,000, divided by 95% of the current market price of its shares on the redemption date. Accrued interest will be paid in cash.

"With APUC's current lower cost of capital, redeeming these relatively high cost debentures for equity represents an accretive transaction for APUC on both an earnings per share and cash flow per share basis," chief financial officer David Bronicheski said in the release. "This redemption further strengthens our investment grade balance sheet and continues to lower our cost of capital."

Algonquin is an Oakville, Ont.-based electric power and distribution company.

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