By Cristal Cody
Prospect News, May 15 - Valener Inc. announced on Tuesday that it sold an upsized C$100 million of cumulative rate reset preferred shares that yield 4.35% for the initial fixed-rate period ending Oct. 15, 2017.
The company sold 4 million shares of the series A preferred stock (DBRS: Pfd-2) at C$25.00 per share.
The deal was upsized from C$75 million, or 3 million shares.
BMO Capital Markets Corp. and TD Securities Inc. were the lead managers.
The dividend rate will reset on Oct. 15, 2017 and every five years thereafter at a rate equal to the five-year Government of Canada bond yield plus 281 basis points.
The shares are redeemable by Valener on or after Oct. 15, 2017, in accordance with company terms.
Proceeds will be used to subscribe to additional units of Gaz Metro LP in order for Gaz Metro to finance part of its proposed acquisition of Central Vermont Public Service Corp. and any balance for general corporate purposes. If the acquisition does not proceed, Valener will use the net proceeds to repay amounts under its credit facility and for general corporate purposes.
The company is Quebec's leading natural gas distributor and owns about 29% of Gaz Metro.
| Issuer: | Valener Inc.
|
| Amount: | C$100 million, or 4 million shares
|
| Maturity: | Oct. 15, 2017
|
| Securities: | Cumulative rate reset preferred shares
|
| Bookrunners: | BMO Capital Markets Corp., TD Securities Inc.
|
| Dividend: | 4.35%, resets on Oct. 15, 2017 and every five years at five-year Government of Canada bond yield plus 281 bps
|
| Price: | C$25.00 per share
|
| Yield: | 4.35%
|
| Call feature: | On or after Oct. 15, 2017
|
| Pricing date: | May 15
|
| Settlement date: | June 6
|
| Rating: | DBRS: Pfd-2
|
| Distribution: | Canada
|
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