PrefBlog

AltaGas has announced:

that it will issue 6,000,000 Cumulative Redeemable Five-Year Fixed Rate Reset Preferred Shares, Series C (the “Series C Preferred Shares”), at a price of US$25.00 per Series C Preferred Share (“the Offering”) for aggregate gross proceeds of US$150 million on a bought deal basis. The Series C Preferred Shares will be offered to the public through a syndicate of underwriters, co-led by RBC Capital Markets, CIBC and Scotiabank.

Holders of the Series C Preferred Shares will be entitled to receive a cumulative quarterly fixed dividend for the initial period ending on but excluding September 30, 2017 (the “Initial Period”) at an annual rate of 4.40%, payable on the last day of March, June, September and December, as and when declared by the Board of Directors of AltaGas. The first quarterly dividend payment is payable on October 1, 2012 and shall be US$0.3473 per Series C Preferred Share. The dividend rate will reset on September 30, 2017 and every five years thereafter at a rate equal to the sum of the then five-year US government bond yield plus 3.58%. The Series C Preferred Shares are redeemable by AltaGas, at its option, on September 30, 2017 and on September 30 of every fifth year thereafter.

Holders of Series C Preferred Shares will have the right to convert all or any part of their shares into Cumulative Redeemable Floating Rate Preferred Shares, Series D (the “Series D Preferred Shares”), subject to certain conditions, on September 30, 2017 and on September 30 every fifth year thereafter. Holders of Series D Preferred Shares will be entitled to receive a cumulative quarterly floating dividend at a rate equal to the sum of the then three-month US treasury bill yield plus 3.58%, as and when declared by the Board of Directors of AltaGas.

The Offering is expected to close on or about June 6, 2012. Net proceeds will be used to reduce outstanding indebtedness and for general corporate purposes.

AltaGas has granted to the underwriters an option, exercisable in whole or in part at any time up to 48 hours prior to the closing time of the offering, to purchase an additional 2,000,000 Series C Preferred Shares at a price of US$25.00 per share.

The Series C Preferred Shares will be issued pursuant to a prospectus supplement that will be filed with securities regulatory authorities in Canada under AltaGas’ short form base shelf prospectus dated December 7, 2011. The Offering is subject to receipt of all necessary regulatory and stock exchange approvals.

Update, 2012-5-31:Rated Pfd-3 by DBRS.

Update, 2013-2-27: Trades as ALA.PR.U

This entry was posted on Tuesday, May 29th, 2012 at 7:00 pm and is filed under New Issues, US Pay. 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.