Pembina Pipeline Corporation (Pembina) is pleased to announce that it has entered into an agreement with a syndicate of underwriters co-led by RBC Capital Markets and Scotiabank (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 13 (Series 13 Preferred Shares) at a price of CAN$25.00 per share for distribution to the public.
The holders of Series 13 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 March, 1 June, 1 September and 1 December, as and when declared by the Board of Directors of Pembina, yielding 5.75% per annum, for the initial fixed rate period to but excluding 1 June 2021.
The first quarterly dividend payment date is scheduled for 1 September 2016. The dividend rate will reset on 1 June 2021 and every five years thereafter at a rate equal to the sum of the then five year Government of Canada bond yield plus 4.96%, provided that, in any event, such rate shall not be less than 5.75% per annum. The Series 13 Preferred Shares are redeemable by Pembina, at its option, on 1 June 2021 and on 1 June of every fifth year thereafter at a price of CAN$25.00 per share plus accrued and unpaid dividends.
The holders of Series 13 Preferred Shares will have the right to convert their shares into cumulative redeemable floating rate class A preferred shares, Series 14 (Series 14 Preferred Shares), subject to certain conditions, on 1 June 2021 and on 1 June of every fifth year thereafter. The holders of Series 14 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 4.96%.
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 13 Preferred Shares at a price of CAN$25.00 per share.
Closing of the offering is expected on 27 April 2016, subject to customary closing conditions.
The company intends to use the net proceeds from the offering of Series 13 Preferred Shares for capital expenditures and working capital requirements in connection with the company's 2016 capital programme and to reduce indebtedness under the company's credit facilities.
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.
Pembina is also pleased to announce that it has received approval under the Competition Act (Canada) for its previously announced acquisition of certain midstream assets from Paramount Resources. As such, Pembina expects closing of the acquisition to occur on or around 22 April 2016.
Edited from source by Stephanie Roker
Read the article online at: https://www.worldpipelines.com/business-news/19042016/pembina-share-offering-and-acquisition-update/