By Cristal Cody
Tupelo, Miss, March 23 – Veresen Inc. announced on Monday that it priced C$200 million of cumulative redeemable preferred shares to yield 5% for the initial period ending June 30, 2020.
The company sold 8 million shares of series E preferred shares (DBRS: Pfd-3) at C$25.00 per share.
Scotia Capital Inc., TD Securities Inc. and RBC Capital Markets (Canada) Ltd. were the lead managers.
The preferred stock is redeemable by Veresen on June 30, 2020 and on June 30 of every fifth year thereafter at C$25.00 per share plus accrued and unpaid dividends.
The dividend rate will reset on June 30, 2020 and every five years thereafter at a rate equal to the five-year Government of Canada bond yield plus 427 basis points.
Preferred shareholders will have the right to convert all or part of their shares into series F cumulative redeemable preferred shares on June 30, 2020 and on June 30 of every fifth year thereafter.
Series F preferred shareholders will be entitled to receive quarterly floating-rate dividends at a rate equal to the 90-day Government of Canada treasury bill yield plus 427 bps.
An application has been made to list the series E and series F preferred shares on the Toronto Stock Exchange.
Veresen plans to use the proceeds from the offering to repay debt outstanding under the company’s credit facility.
The pipeline and energy company is based in Calgary, Alta.
| Issuer: | Veresen Inc.
|
| Amount: | C$200 million, 8 million shares
|
| Maturity: | June 30, 2020
|
| Securities: | Cumulative redeemable preferred shares
|
| Bookrunners: | Scotia Capital Inc., TD Securities Inc., RBC Capital Markets (Canada) Ltd.
|
| Dividend: | 5%
|
| Price: | C$25.00 per share
|
| Resets: | June 30, 2020 and every following fifth year at five-year Government of Canada bond yield plus 427 bps
|
| Call feature: | June 30, 2020 and on June 30 of every fifth year thereafter
|
| Pricing date: | March 23
|
| Settlement date: | April 1
|
| Rating: | DBRS: Pfd-3
|
| Distribution: | Canada
|
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