Pembina’s share offering agreement

Pembina Pipeline Corporation (Pembina) is pleased to announce that it has entered into an agreement with a syndicate of underwriters co-led by Scotiabank, BMO Capital Markets and RBC Capital Markets (together, the Underwriters) pursuant to which the Underwriters have agreed to purchase from Pembina 6 000 000 cumulative redeemable minimum rate reset class A preferred shares, Series 11 (the ‘Series 11 Preferred Shares’) at a price of CAN$25.00 per share for distribution to the public.

Holders’ shares

The holders of Series 11 Preferred Shares will be entitled to receive fixed cumulative dividends at an annual rate of CAN$1.4375 per share, payable quarterly on the 1^st day of March, June, September and December, as and when declared by the Board of Directors of Pembina, yielding 5.75 per cent per annum, for the initial fixed rate period to but excluding 1 March 2021.

Q1 dividend payment

The first quarterly dividend payment date is scheduled for 1 March 2016. The dividend rate will reset on 1 March 2021 and every five years thereafter at a rate equal to the sum of the then five year Government of Canada bond yield plus 5.00 per cent, provided that, in any event, such rate shall not be less than 5.75% per annum. The Series 11 Preferred Shares are redeemable by Pembina, at its option, on 1 March 2021 and on 1 March of every fifth year thereafter at a price of CAN$25.00 per share plus accrued and unpaid dividends.

Converting shares

The holders of Series 11 Preferred Shares will have the right to convert their shares into cumulative redeemable floating rate class A preferred shares, Series 12 (the ‘Series 12 Preferred Shares’), subject to certain conditions, on 1 March 2021 and on 1 March of every fifth year thereafter. The holders of Series 12 Preferred Shares will be entitled to receive quarterly floating rate cumulative dividends, as and when declared by the Board of Directors of Pembina, at a rate equal to the sum of the then 90 day Government of Canada treasury bill rate plus 5.00 per cent.

Pembina has granted to the Underwriters an option, exercisable at any time up to 48 hrs prior to the closing of the offering, to purchase up to an additional 2 000 000 Series 11 Preferred Shares at a price of CAN$25.00 per share.

Closing of the offering is expected on January 15, 2016, subject to customary closing conditions.

Net proceeds

The company intends to use the net proceeds from the offering of Series 11 Preferred Shares to reduce indebtedness of the company under its credit facilities as well as for capital expenditures and working capital requirements in connection with the company's 2016 capital programme. The indebtedness of the company was incurred in the normal course of business to fund the company's capital programme.

The offering is being made by means of a prospectus supplement under the short form base shelf prospectus filed by the company on 18 March 2015 in each of the provinces of Canada.

Edited from source by Stephanie Roker

Read the article online at: https://www.worldpipelines.com/business-news/07012016/pembinas-share-offering-agreement/