AZP.PR.B Resets Reset To 5.739%

Atlantic Power Corporation and Atlantic Power Preferred Equity Ltd have announced:

The rate reset for the Series 2 Shares, announced on December 2, 2019, using a fixed dividend rate (the “Fixed Dividend Rate”), was calculated on November 29, 2019 to be 5.67%, representing the sum of the Canadian Government five-year bond yield of 1.49% plus 4.18%.

This Fixed Dividend Rate announced on December 2, 2019 has been revised based on a calculation as of December 2, 2019 to be 5.739%, representing the sum of the Canadian Government five-year bond yield of 1.559% plus 4.18%.

Such Fixed Dividend Rate will commence with the March 31, 2020 dividend payment to the holders of the Series 2 Shares and continue through the December 31, 2024 dividend payment to the holders of the Series 2 Shares, at which time such Fixed Dividend Rate will again be reset.

The dividend rate for the Series 3 Shares, announced on December 2, 2019, using a floating dividend rate (the “Floating Dividend Rate”), was calculated on November 29, 2019 to be 5.83%, representing the sum of the Canadian Government 90-day Treasury Bill yield (using the three-month average result of 1.65%) plus 4.18%. This Floating Dividend Rate announced on December 2, 2019 remains unchanged. Such Floating Dividend Rate will be effective with the March 31, 2020 dividend payment to the holders of the Series 3 Shares. The Floating Dividend Rate for Series 3 Shares will be reset each quarter.

On December 31, 2019 and again on December 31 of every fifth year thereafter, the holders of Series 2 Shares have the right to convert their Series 2 Shares, on a one-for-one basis, into Series 3 Shares and the holders of Series 3 Shares have the right to convert their Series 3 Shares, on a one-for-one basis, into Series 2 Shares.

Holders of Series 2 Shares or Series 3 Shares who wish to convert such securities into Series 3 Shares or Series 2 Shares, respectively, should contact the financial institution, broker or other intermediary through which they hold the Series 2 Shares or Series 3 Shares to exercise this conversion privilege. Notice of the exercise of the conversion privilege (an “Election Notice”) must be received by Preferred Equity not earlier than December 1, 2019 and not later than 5:00 p.m. (Toronto time) on December 16, 2019.

Automatic Conversion and Restrictions on Conversion

Series 2 Shares

If, after giving effect to all Election Notices, there would remain outstanding less than 1 million Series 2 Shares, then all remaining outstanding Series 2 Shares will automatically convert into Series 3 Shares, on a one-for-one basis on December 31, 2019. Holders of the Series 2 Shares will not be permitted to convert their Series 2 Shares into Series 3 Shares if, after giving effect to all Election Notices, there would be outstanding less than 1 million Series 3 Shares.

Series 3 Shares

If, after giving effect to all Election Notices, there would remain outstanding less than 1 million Series 3 Shares, then all remaining outstanding Series 3 Shares will automatically convert into Series 2 Shares, on a one-for-one basis on December 31, 2019. Holders of the Series 3 Shares will not be permitted to convert their Series 3 Shares into Series 2 Shares if, after giving effect to all Election Notices, there would be outstanding less than 1 million Series 2 Shares.

This announcement cancels and corrects the previously announced reset rate of 5.67%

AZP.PR.B used to be CZP.PR.B, which used to be EPP.PR.B, and throughout these changes was a FixedReset, 7.00%+418, which commenced trading 2009-11-2 after being announced 2009-10-13. You can’t tell your players without a programme! Notice of extension was provided in November, 2014, and it reset to 5.57% effective 2014-12-31. I recommended in favour of conversion and the conversion rate was 42%. The company announced the extension to 2024 on 2019-11-14. An erroneous announcement of a reset to 5.67% was announced 2019-12-2.

AZP.PR.C resulted from the partial conversion of AZP.PR.B and commenced trading 2014-12-31.

I commend Atlantic Power on their swift and straightforward resolution of this problem.

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