Husky Energy to convert none of series 3 preferreds, lacks tenders

By Marisa Wong

Los Angeles, Dec. 18 – Husky Energy Inc. said it will not be converting any of its series 3 cumulative redeemable preferred shares into series 4 cumulative redeemable preferred shares on Dec. 31.

Only 71,606 series 3 preferreds were tendered for conversion, which is less than the 1 million shares required for conversion, according to a Wednesday press release.

As previously announced, Husky elected not to redeem the series 3 preferreds on Dec. 31. As a result, holders could retain any or all of their series 3 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 3 shares into series 4 shares and receive a floating-rate quarterly dividend.

The new quarterly dividend rate for the series 3 shares for the five-year period starting Dec. 31, 2019 to but excluding Dec. 31, 2024 will be 4.636%, equal to the sum of the Canada five-year bond yield of 1.506% plus 313 basis points.

Holders of the series 3 shares and the series 4 shares will have the opportunity to convert their shares again on Dec. 31, 2024 and every five years after that as long as the shares remain outstanding.

The energy company is based in Calgary, Alta.

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