By Cristal Cody
Prospect News, Aug. 2 - TransAlta Corp. said on Thursday that it sold C$150 million of cumulative redeemable rate reset first preferred shares (Ba2/P-3/DBRS: Pfd-3) to yield a 5% annual dividend for the initial period ending Sept. 30, 3017.
The company sold 6 million shares of the series E stock at C$25.00 per share.
CIBC World Markets Inc., RBC Capital Markets Corp. and Scotia Capital Inc. were the lead managers.
The deal includes an over-allotment option of C$75 million, or 3 million shares.
The dividend rate will reset every five years at a rate equal to the five-year Government of Canada bond yield plus 365 basis points.
Holders will have the right to convert their shares into series F cumulative redeemable floating-rate reset first preferred shares on Sept. 30, 2017 and on Sept. 30 every five years thereafter. Series F shareholders will be entitled to receive cumulative quarterly floating dividends at a rate equal to the three-month Government of Canada treasury bill yield plus 365 bps.
Proceeds from the sale will be used to partially fund capital projects, for other general corporate purposes and to reduce short-term debt.
TransAlta is a Calgary, Alta.-based power company.
| Issuer: | TransAlta Corp.
|
| Amount: | C$150 million, 6 million shares
|
| Greenshoe: | C$75 million, 3 million shares
|
| Maturity: | Sept. 30, 3017
|
| Securities: | Cumulative redeemable rate reset first preferred shares
|
| Bookrunners: | CIBC World Markets Inc., RBC Capital Markets Corp., Scotia Capital Inc.
|
| Dividend: | 5%
|
| Price: | C$25.00 per share
|
| Yield: | 5%
|
| Pricing date: | Aug. 2
|
| Settlement date: | Aug. 10
|
| Ratings: | Moody's: Ba2
|
| Standard & Poor's: P-3
|
| DBRS: Pfd-3
|
| Distribution: | Canada
|
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