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TransAlta elects not to call series C preferreds; holders may convert
By Angela McDaniels
Tacoma, Wash., June 5 – TransAlta Corp. does not intend to redeem its cumulative redeemable rate-reset first preferred shares, series C, on their June 30 conversion date, according to a company news release.
Holders have the right to convert their series C preferreds into cumulative redeemable first preferred shares, series D, on a one-to-one basis on the conversion date.
The annual dividend rate for the series C preferreds for the five years beginning June 30 will be 4.027%, which is equal to the five-year Government of Canada bond yield of 0.927% plus 310 basis points.
The annual dividend rate for the series D preferreds will be the 90-day Government of Canada Treasury bill rate plus 310 bps. For the quarter beginning June 30, this rate will be equal to 3.629%.
If TransAlta determines that there would remain outstanding on June 30 less than 1 million series C preferreds, all remaining series C preferred will be converted automatically into series D preferreds on a one-for-one basis effective June 30.
If TransAlta determines that there would remain outstanding after June 30 less than 1 million series D preferreds, the holders of the series C preferreds will not be entitled to convert their preferreds into series D preferreds on June 30.
There are currently 11 million series C preferreds outstanding.
The deadline to select conversion is 5 p.m. ET on June 15.
Holders of the series C preferreds and the series D preferreds will have the opportunity to convert their preferreds again on June 30, 2022 and every five years thereafter.
The Toronto Stock Exchange has conditionally approved the listing of the series D preferreds.
TransAlta is a power generation and wholesale marketing company based in Calgary, Alta.
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