Emera Incorporated has announced:
that it will issue eight million Cumulative Rate Reset First Preferred Shares, Series F (the “Series F Preferred Shares”) at a price of $25.00 per share and at an initial annual dividend rate of 4.25 per cent, for aggregate gross proceeds of $200 million on a bought deal basis to a syndicate of underwriters in Canada led by Scotiabank.
The holders of the Series F Preferred Shares will be entitled to receive fixed cumulative preferential cash dividends at an annual rate of $1.0625 per share, payable quarterly, as and when declared by the board of directors of Emera, yielding 4.25 per cent per annum, for the initial period ending on February 15, 2020. The first of such dividends, if declared, shall be payable on August 15, 2014, and shall be $0.1950 per Series F Preferred Share, based on the anticipated closing of the offering on June 9, 2014. The dividend rate will be reset on February 15, 2020 and every five years thereafter at a rate equal to the sum of the then five-year Government of Canada bond yield plus 2.63 per cent. The Series F Preferred Shares are redeemable by Emera, at its option, on February 15, 2020 and on February 15 of every fifth year thereafter.
The holders of Series F Preferred Shares will have the right to convert their shares into Cumulative Floating Rate First Preferred Shares, Series G (the “Series G Preferred Shares”), subject to certain conditions, on February 15, 2020 and on February 15 of every fifth year thereafter. The holders of the Series G Preferred Shares will be entitled to receive quarterly floating rate cumulative preferential cash dividends, as and when declared by the board of directors of Emera, at a rate equal to the sum of the then 90-day Government of Canada treasury bill rate plus 2.63 per cent.
The offering is subject to the receipt of all necessary regulatory and stock exchange approvals. The net proceeds of the offering will be used for general corporate purposes.
This joins their two extant FixedReset issues, EMA.PR.A, 4.40%+184, resets 2015-8-15, and EMA.PR.C, 4.10%+265, resets 2018-8-15. Both issues got hammered today … EMA.PR.A closed at 21.31-49, down 34 cents; EMA.PR.C closed at 24.81-95, down 29 cents.
Their PerpetualDiscount, EMA.PR.E, was yielding 5.11% at the closing bid yesterday, so the Break Even Rate Shock on this issue is 1.00%, a very low figure by recent standards. FixedResets haven’t been fashionable lately!