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Increased offering of TransCanada preferred shares

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World Pipelines,


TransCanada Corporation (TransCanada) has announced that, as a result of strong investor demand for its previously announced offering of cumulative redeemable minimum rate reset first preferred shares, series 15 (Series 15 Preferred Shares), the size of the offering has been increased to 40 million shares.

The offering no longer includes the previously granted underwriters' option. The aggregate gross proceeds of the offering will now be CAN$1.0 billion. The syndicate of underwriters is led by Scotiabank, BMO Capital Markets, CIBC Capital Markets, RBC Capital Markets and TD Securities Inc.

The anticipated closing date is 21 November 2016. The net proceeds of the offering will be used for general corporate purposes and to reduce short term indebtedness of TransCanada and its affiliates, which short term indebtedness was used to fund TransCanada's capital program and for general corporate purposes.

The holders of Series 15 Preferred Shares will be entitled to receive fixed cumulative dividends at an annual rate of CAN$1.2250 per share, payable quarterly on the last business day of February, May, August and November, as and when declared by the board of directors of TransCanada. The Series 15 Preferred Shares will yield 4.90% per annum for the initial fixed rate period ending 31 May 2022 with the first dividend payment date scheduled for 28 February 2017. The dividend rate will reset on 31 May 2022 and on the last business day of May in every fifth year thereafter to a rate equal to the sum of the then five year Government of Canada bond yield plus 3.85%, provided that, in any event, such rate shall not be less than 4.90% per annum. The Series 15 Preferred Shares are redeemable by TransCanada, at its option, on 31 May 2022 and on the last business day of May in every fifth year thereafter at a price of CAN$25.00 per share plus accrued and unpaid dividends.

The holders of Series 15 Preferred Shares will have the right to convert their shares into cumulative redeemable first preferred shares, series 16 (Series 16 Preferred Shares), subject to certain conditions, on 31 May 2022 and on the last business day of May in every fifth year thereafter. The holders of Series 16 Preferred Shares will be entitled to receive quarterly floating rate cumulative dividends, as and when declared by the board of directors of TransCanada, at an annualised rate equal to the sum of the then 90 day Government of Canada treasury bill rate plus 3.85%.

The Series 15 Preferred Shares will be offered to the public in Canada pursuant to a prospectus supplement that will be filed with securities regulatory authorities in Canada under TransCanada's short form base shelf prospectus dated 23 December 2015. The securities referred to herein have not been and will not be registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the US absent registration or an applicable exemption from registration requirements.

Read the article online at: https://www.worldpipelines.com/business-news/15112016/increased-offering-of-transcanada-preferred-shares/


 

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