By Cristal Cody
Tupelo, Miss., Oct. 9 - Veresen Inc. announced on Wednesday that it priced C$150 million of cumulative redeemable preferred shares to yield a 5% annual dividend for the initial period up to but excluding March 31, 2019.
The company sold 6 million series C preferred shares (DBRS: Pfd-3) at C$25.00 per share on a bought-deal basis.
Scotia Capital Inc., TD Securities Inc. and CIBC World Markets Inc. were the lead managers.
The deal includes an over-allotment option of C$50 million, or 2 million shares.
The dividend rate will reset on March 31, 2019 and every five years thereafter at a rate equal to the five-year Government of Canada bond yield plus 3.01%.
Holders will have the right to convert the series C shares into series D shares on March 31, 2019 and on March 31 of every fifth year and receive quarterly floating-rate cumulative dividends at a rate equal to the 90-day Government of Canada treasury bill rate plus 301 basis points.
The shares are redeemable by Veresen at its option on March 31, 2019 and every fifth year thereafter on March 31 at C$25.00 per share plus accrued and unpaid dividends.
The Calgary, Alta.-based pipeline and energy company plans to use the proceeds to reduce debt, to partially fund capital expenditures and for other general corporate purposes.
| Issuer: | Veresen Inc.
|
| Amount: | C$150 million, 6 million shares
|
| Greenshoe: | C$50 million, 2 million shares
|
| Maturity: | Up to but excluding March 31, 2019
|
| Securities: | Cumulative redeemable preferred shares
|
| Bookrunners: | Scotia Capital Inc., TD Securities Inc., CIBC World Markets Inc.
|
| Dividend: | 5%
|
| Price: | C$25.00 per share
|
| Call feature: | March 31, 2019 and March 31 every fifth year thereafter
|
| Pricing date: | Oct. 9
|
| Settlement date: | Oct. 21
|
| Rating: | DBRS: Pfd-3
|
| Distribution: | Canada
|
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