New Issue: BAF FixedReset, 4.25%+264

Bell Aliant has announced:

that its subsidiary Bell Aliant Preferred Equity Inc. (the “Company”) will be issuing 8,000,000 Cumulative 5-Year Rate Reset Preferred Shares, Series E (the “Series E Preferred Shares”), at a price of $25.00 per Series E Preferred Share, for aggregate gross proceeds of $200 million on a bought-deal basis to a syndicate of underwriters led by Scotiabank, TD Securities Inc., and CIBC.

The underwriters have been granted an over-allotment option to purchase an additional 1,200,000 Series E Preferred Shares at the offering price. Should the over-allotment option be fully exercised, the total gross proceeds of the Series E Preferred Share offering will be $230 million.

The Series E Preferred Shares will pay cumulative dividends of $1.0625 per share per annum, yielding 4.25 per cent, payable quarterly if, as and when declared by the Company’s board of directors (with the first quarterly dividend to be paid on June 30, 2013), for the initial five and a half year period ending September 30, 2018. The dividend rate will be reset on September 30, 2018 and every five years thereafter at a rate equal to the five-year Government of Canada bond yield plus 2.64 per cent. The Series E Preferred Shares will be redeemable by the issuer on or after September 30, 2018, in accordance with their terms.

Holders of the Series E Preferred Shares will have the right, at their option, to convert their shares into Cumulative Floating Rate Preferred Shares, Series F, (the “Series F Preferred Shares”) subject to certain conditions, on September 30, 2018 and on September 30 every five years thereafter. Holders of the Series F Preferred Shares will be entitled to receive cumulative quarterly floating dividends at a rate equal to the three-month Government of Canada Treasury Bill yield plus 2.64 per cent, if, as and when declared by the Company’s board of directors.

The Series E Preferred Shares will be offered for sale to the public in each of the provinces and territories of Canada pursuant to a short form prospectus to be filed with Canadian securities regulatory authorities in all Canadian provinces and territories. The offering is scheduled to close on or about February 14, 2013, subject to certain conditions, including obtaining all necessary regulatory approvals.

The net proceeds of this offering will be used for repayment of short term debt and general corporate purposes.

Update, 2013-2-6: Rated Pfd-3 by DBRS.

One Response to “New Issue: BAF FixedReset, 4.25%+264”

  1. […] is a FixedReset, 4.25%+264, announced January 30. The announced issue size of $200-million implies that the greenshoe option for another $30-million […]

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