PrefBlog

CU Inc. has announced:

it has entered into an agreement with a syndicate of underwriters led by BMO Capital Markets and RBC Capital Markets, and including TD Securities Inc. The underwriters have agreed to buy 3,000,000 3.80% Cumulative Redeemable Preferred Shares Series 4 at a price of $25.00 per share for aggregate gross proceeds of $75,000,000. The Corporation intends to use the proceeds to purchase preferred shares to be issued by its wholly owned operating subsidiaries, ATCO Electric Ltd. and ATCO Gas and Pipelines Ltd. It is expected that these subsidiaries will use the proceeds to fund a portion of their 2010 capital expenditure programs, to repay existing indebtedness, and for other general corporate purposes.

The Series 4 Preferred Shares will be issued to the public at a price of $25.00 per share and holders will be entitled to receive fixed cumulative preferential cash dividends, payable quarterly for an initial period of five years, as and when declared by the Board of Directors of the Corporation, at an annual rate of $0.95 per share, to yield 3.80% annually. Thereafter, the dividend rate will reset every five years to the then current 5-Year Government of Canada bond yield plus 1.36%. On June 1, 2016, and on June 1 of every fifth year thereafter, the Corporation may redeem the Series 4 Preferred Shares in whole or in part at par.

Holders may elect to convert any or all of their Series 4 Preferred Shares into an equal number of Cumulative Redeemable Preferred Shares Series 5 on June 1, 2016, and on June 1 of every fifth year thereafter. Holders of the Series 5 Preferred Shares will be entitled to receive quarterly floating rate cumulative preferential cash dividends, as and when declared by the board of directors, equal to the then current 3-month Government of Canada Treasury Bill yield plus 1.36%. On June 1, 2021, and on June 1 of every fifth year thereafter, the Corporation may redeem the Series 5 Preferred Shares in whole or in part at par. The Corporation may redeem the Series 5 Preferred Shares in whole or in part by the payment of $25.50 for each share to be redeemed in the case of redemption on any other date.

The offering is being made only in the provinces of Canada by means of a prospectus and the closing date of the issue is expected to be on or about December 2, 2010.

It is of interest to note that they issued long debs yesterday:

CU Inc. announced today that it will issue $125,000,000 of
4.947% Debentures maturing on November 18, 2050, at a price of $100.00 to yield 4.947%. This issue was sold by RBC Dominion Securities Inc., BMO Nesbitt Burns Inc., and TD Securities Inc. Proceeds from the issue will be used to finance capital expenditures, to repay existing indebtedness, and for other general corporate purposes of ATCO Electric Ltd.

Update, 2010-11-19: Rated Pfd-2(high) by DBRS and debs rated A(high).

This entry was posted on Tuesday, November 16th, 2010 at 3:53 pm and is filed under New Issues. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.