Algonquin holders to exchange all 7.5% convertibles for shares

By Toni Weeks

San Diego, April 7 - Algonquin Power & Utilities Corp. has issued a call to fully redeem its series 1A 7.5% convertible subordinated debentures due Nov. 30, 2014 on May 16 by exchanging them for stock, according to a news release.

The company will pay holders of the debentures by issuing a number of shares equal to the aggregate principal amount, currently C$62,397,050, divided by 95% of the market price of Algonquin shares on May 16. Accrued interest will be paid in cash.

According to chief financial officer David Bronicheski, the debentures were issued in 2009, a turbulent time in the capital markets.

"In today's market, APUC's lower cost of capital means that converting these relatively high-cost debentures to equity represents an accretive transaction for APUC on both an earnings-per-share and cash-flow-per-share basis," Bronicheski said in the release. "Additionally, this conversion further strengthens APUC's balance sheet consistent with our objective of lowering our cost of capital and maintaining a solid investment grade capital structure."

Algonquin is an Oakville, Ont.-based investment trust that owns and has interests in power-generating and infrastructure assets. It is the sole beneficiary of Algonquin Power Trust.

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