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Hydro One to redeem all C$1.54 billion 4% convertible debentures
By Sarah Lizee
Olympia, Wash., Jan. 23 – Hydro One Ltd. said it will redeem all C$1.54 billion of its outstanding 4% convertible unsecured subordinated debentures represented by installment receipts on Feb. 8.
The redemption is the result of its terminated plan of merger originally entered into with Avista Corp. on July 19, 2017, according to a press release.
The convertible debentures were originally issued to fund a portion of the cash purchase price for the acquisition of Avista and were sold by 2582764 Ontario Inc., a wholly owned subsidiary of Hydro One, on an installment basis at a price of C$1,000 per convertible debenture, of which C$333 was paid as a first installment on the closing of the offering and the remaining C$667 was to be paid as a final instalment on a date to be fixed by the company following satisfaction of all conditions precedent to the closing of the acquisition of Avista.
At redemption, holders of installment receipts will receive C$333 per C$1,000 principal amount, or C$512,820,000 in total, plus accrued interest to but excluding the date of redemption.
As the selling debenture holder, 2582764 Ontario will receive the remaining C$667 per C$1,000 principal amount in satisfaction of the obligation of the holders of installment receipts to pay the final installment.
Hydro One intends to fund the redemption through cash on hand and available credit facilities.
The installment receipts are listed and posted for trading on the Toronto Stock Exchange under the symbol “H.IR.”
Hydro One and its subsidiaries are based in Toronto, providing and distributing power for the province of Ontario.
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