Pembina says holders may convert series 19 class A preferred shares

By Sarah Lizee

Olympia, Wash., June 1 – Pembina Pipeline Corp. said it does not intend to exercise its right to redeem the currently outstanding cumulative redeemable rate reset class A preferred shares, series 19 on June 30.

As a result, holders of the series 19 preferreds will have the right to convert all or part of their series 19 preferreds on a one-for-one basis into cumulative redeemable floating-rate class A preferred shares, series 20 of Pembina on June 30.

Holders who do not exercise their right to convert will retain their series 19 preferreds.

If Pembina determines that there would remain outstanding immediately following the conversion less than 1 million series 19 preferreds, then all remaining series 19 preferreds will be automatically converted into series 20 preferreds on a one-for-one basis effective June 30.

If Pembina determines that there would be less than 1 million series 20 preferreds after June 30, no series 19 preferreds will be converted into series 20 preferreds on the conversion date. There are currently 8 million series 19 preferreds outstanding.

With respect to any series 19 preferreds that remain outstanding after June 30, holders will be entitled to receive quarterly fixed cumulative preferential cash dividends, if, as and when declared by the board of directors of Pembina.

The annual dividend rate for the series 19 preferreds for the five-year period from and including June 30, 2020 to but excluding June 30, 2025 will be 4.684%, being equal to the five-year government of Canada bond yield of 0.414% determined as of June 1 plus 4.27%.

With respect to any series 20 preferreds that may be issued on June 30, holders thereof will be entitled to receive quarterly floating-rate cumulative preferential cash dividends, if, as and when declared by the board of directors of Pembina.

The annual dividend rate applicable to series 20 preferreds for the three-month floating-rate period from and including June 30, 2020 to but excluding Sept. 1, 2020 will be 4.525%, being equal to the annual rate of interest for the most recent auction of 90-day government of Canada treasury bills of 0.255% plus 4.27%.

The floating quarterly dividend rate will be reset every quarter.

The conversion period runs from June 1 until 5 p.m. on June 15.

The dividend payable on June 30 to holders of the series 19 preferreds of record on June 15 will be $0.312500 per series 19 preferreds, consistent with the dividend rate in effect since issuance of the series 19 preferreds.

Calgary, Alta.-based Pembina Pipeline is a transportation and midstream service provider to the energy industry.

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