Husky Energy announces conversion right for series 5 preferred shares

By Sarah Lizee

Olympia, Wash., March 2 – Husky Energy said it does not intend to exercise its right to redeem its cumulative redeemable preferred shares, series 5, on March 31, according to a press release.

As a result, holders have the right to either retain any or all of their series 5 shares and continue to receive an annual fixed-rate dividend paid quarterly or convert on a one-for-one basis any or all of their series 5 shares into cumulative redeemable preferred shares, series 6, of Husky and receive a floating-rate quarterly dividend.

Conversion to series 6 shares is subject to the conditions that if Husky determines that there would be less than 1 million series 5 shares outstanding after March 31, then all remaining series 5 shares will automatically be converted to series 6 shares on a one-for-one basis on March 31, and, if Husky determines that there would be less than 1 million series 6 shares outstanding after March 31, no series 5 shares will be converted into series 6 shares.

Holders of series 5 shares who choose to retain any or all of their shares will receive the new fixed-rate quarterly dividend applicable to the series 5 shares for the five-year period commencing March 31 to but excluding March 31, 2025 of 4.591%, being equal to the sum of the Canada five-year bond yield of 1.021% plus 357 basis points.

Holders of series 5 shares who choose to convert their shares to series 6 shares will receive a new floating-rate quarterly dividend applicable to the series 6 shares. The dividend rate applicable to the series 6 shares for the three-month period commencing March 31 to but excluding June 30 will be 5.208%, being equal to the annual rate for the most recent auction of 90-day Canada Treasury Bills of 1.638% plus 357 bps. The floating quarterly dividend rate will be reset every quarter.

Beneficial owners of series 5 shares who wish to exercise the right of conversion should communicate as soon as possible with their brokers or other nominees in order to meet the deadline, which is 5 p.m. ET on March 16.

Holders of series 5 shares who do not exercise the right of conversion by this deadline will continue to hold series 5 shares with the new annual fixed-rate dividend.

Holders of the series 5 shares and the series 6 shares will have the opportunity to convert their shares again on March 31, 2025 and every five years onwards as long as the shares remain outstanding.

The energy company is based in Calgary, Alta.

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