Category: New Issues

Pembina Pipeline Corporation has announced:

that it has entered into an agreement with a syndicate of underwriters, led by RBC Capital Markets and Scotiabank, pursuant to which the underwriters have agreed to purchase from Pembina 8,000,000 cumulative redeemable rate reset class A preferred shares, series 1 (the “Series 1 Preferred Shares”) at a price of $25.00 per share for distribution to the public.

The holders of Series 1 Preferred Shares will be entitled to receive fixed cumulative dividends at an annual rate of $1.0625 per share, payable quarterly on the 1st day of March, June, September and December, as and when declared by the Board of Directors of Pembina, yielding 4.25 per cent per annum, for the initial fixed rate period to but excluding December 1, 2018. The first quarterly dividend payment date is scheduled for December 1, 2013. The dividend rate will reset on December 1, 2018 and every five years thereafter at a rate equal to the sum of the then five-year Government of Canada bond yield plus 2.47 per cent. The Series 1 Preferred Shares are redeemable by Pembina, at its option, on December 1, 2018 and on December 1 of every fifth year thereafter at a price of $25.00 per share plus accrued and unpaid dividends.

The holders of Series 1 Preferred Shares will have the right to convert their shares into cumulative redeemable floating rate class A preferred shares, series 2 (the “Series 2 Preferred Shares”), subject to certain conditions, on December 1, 2018 and on December 1 of every fifth year thereafter. The holders of Series 2 Preferred Shares will be entitled to receive quarterly floating rate cumulative dividends, as and when declared by the Board of Directors of Pembina, at a rate equal to the sum of the then 90-day Government of Canada treasury bill rate plus 2.47 per cent.

Pembina has granted to the underwriters an option, exercisable at any time up to 48 hours prior to the closing of the offering, to purchase up to an additional 2,000,000 Series 1 Preferred Shares at a price of $25.00 per share.

Proceeds from the offering will be used to partially fund capital projects, to reduce short-term indebtedness and for other general corporate purposes of the Company and its affiliates.

Closing of the offering is expected on July 26, 2013, subject to customary closing conditions.

Update, 2013-7-19: Provisionally rated Pfd-3 by DBRS

Rated Pfd-3 by DBRS.

Fortis Inc. has announced:

that it has entered into an agreement with a syndicate of underwriters led by TD Securities Inc., CIBC and Scotiabank, (collectively, the “Underwriters”), pursuant to which the Underwriters have agreed to purchase, on a bought deal basis, from Fortis and sell to the public 10,000,000 Cumulative Redeemable Fixed Rate Reset First Preference Shares, Series K of the Corporation (the “Series K First Preference Shares”). The purchase price of $25.00 per Series K First Preference Share will result in gross proceeds for Fortis of $250 million.

Fortis has granted the Underwriters the option to purchase up to an additional 2,000,000 Series K First Preference Shares at the same offering price (the “Underwriters’ Option”). Should the Underwriters’ Option be fully exercised, the total gross proceeds of the offering will be $300 million.

The net proceeds of the offering will be used to repay a portion of borrowings under the Corporation’s $1 billion committed corporate credit facility, including amounts borrowed in connection with the redemption of the Corporation’s First Preference Shares, Series C, the construction of the Waneta Expansion and equity injections into certain of the Corporation’s subsidiaries, and for general corporate purposes.

The holders of Series K First Preference Shares will be entitled to receive fixed, cumulative, preferential cash dividends, if, as and when declared by the Board of Directors of the Corporation (the “Board of Directors”), for the initial period commencing on the date of issue and ending on but excluding March 1, 2019 (the “Initial Period”) at a rate of 4.0%, in an amount equal to $1.00 per share per annum paid in equal quarterly instalments. The first of such dividends, if declared, will be payable on September 1, 2013 for the period commencing on the date of issue in the amount of $0.1233 per Series K First Preference Share, based on the anticipated closing of the offering on July 18, 2013. The dividend rate will be reset on March 1, 2019 and thereafter every five years at a level of 2.05% above the five-year Government of Canada Bond yield.

At the end of the Initial Period and every five years thereafter, the holders of Series K First Preference Shares will, subject to certain conditions and the right of the Corporation to redeem those shares, have the option to convert any or all of their Series K First Preference Shares into an equal number of Cumulative Redeemable Floating Rate First Preference Shares, Series L of the Corporation (the “Series L First Preference Shares”). The holders of Series L First Preference Shares will be entitled to receive floating rate cumulative preferential cash dividends, if, as and when declared by the Board of Directors, at the rate of the three-month Government of Canada Treasury Bill average yield plus 2.05%, reset on a quarterly basis.

The offering is subject to the receipt of all necessary regulatory and stock exchange approvals.

The Break Even Rate Shock for this issue is 147bp – somewhat on the high side – given a Current Yield of 5.03% for the FTS PerpetualDiscounts (FTS.PR.J and FTS.PR.F), a yield spread of -1.03% and a term of 5.625 years.

Manulife Financial Corp has announced (although not yet on their website):

a Canadian public offering of Non-cumulative Rate Reset Class 1 Shares Series 13 (“Series 13 Preferred Shares”). Manulife will issue 8 million Series 13 Preferred Shares priced at $25 per share to raise gross proceeds of $200 million. The offering will be underwritten by a syndicate of investment dealers co-led by Scotia Capital Inc. and RBC Capital Markets and is anticipated to qualify as Tier 1 capital for Manulife. The expected closing date for the offering is June 21, 2013. Manulife intends to file a prospectus supplement to its July 18, 2012 base shelf prospectus in respect of this issue.

Holders of the Series 13 Preferred Shares will be entitled to receive a non-cumulative quarterly fixed dividend yielding 3.80 per cent annually, as and when declared by the Board of Directors of Manulife, for the initial period ending September 19, 2018. Thereafter, the dividend rate will be reset every five years at a rate equal to the 5-year Government of Canada bond yield plus 2.22 per cent.

Holders of Series 13 Preferred Shares will have the right, at their option, to convert their shares into Non-cumulative Rate Reset Class 1 Shares Series 14 (“Series 14 Preferred Shares”), subject to certain conditions, on September 19, 2018 and on September 19 every five years thereafter. Holders of the Series 14 Preferred Shares will be entitled to receive non-cumulative quarterly floating dividends, as and when declared by the Board of Directors of Manulife, at a rate equal to the three-month Government of Canada Treasury Bill yield plus 2.22 per cent.

The net proceeds from the offering will be utilized for general corporate purposes, including future refinancing requirements.

“Our financing activities take into account future refinancing needs. We have taken the opportunity to issue preferred shares with favourable terms,” said Senior Executive Vice President and Chief Financial Officer, Steve Roder.

Birchcliff Energy has announced:

that in connection with its previously announced marketed offering of cumulative redeemable preferred shares, Series C (“Preferred Shares, Series C”), it has entered into an underwriting agreement with a syndicate of underwriters and has filed an amended and restated preliminary short form prospectus (the “Amended Preliminary Prospectus”), which amends and restates the Corporation’s preliminary short form prospectus dated May 28, 2013 (the “Preliminary Prospectus”).

The underwriting agreement provides for the sale of 2,000,000 Preferred Shares, Series C, with a 7% yield, at a price of $25.00 per Preferred Share, Series C, for gross proceeds of $50,000,000 (the “Offering”). Holders of the Preferred Shares, Series C will be entitled to receive, as and when declared by the Board of Directors, cumulative annual dividends of $1.75 per Preferred Share, Series C, payable quarterly. The Preferred Shares, Series C will not be redeemable by the Corporation prior to June 30, 2018 and will not be redeemable by the holders of the Preferred Shares, Series C prior to June 30, 2020, in accordance with their terms.

The Amended Preliminary Prospectus reflects the updated terms of the Offering and was filed by the Corporation on May 30, 2013 in all provinces of Canada, except Quebec. The Amended Preliminary Prospectus will be available on Birchcliff’s website at www.birchcliffenergy.com and on SEDAR at www.sedar.com.

The Offering is being conducted through a syndicate of underwriters co-led by National Bank Financial Inc., Cormark Securities Inc. and GMP Securities L.P., on their own behalf and on behalf of CIBC World Markets Inc., RBC Dominion Securities Inc., Scotia Capital Inc., HSBC Securities (Canada) Inc., Macquarie Capital Markets Canada Ltd., Peters & Co. Limited, Stifel Nicolaus Canada Inc. and Integral Wealth Securities Limited (collectively, the “Underwriters”).

Net proceeds of the Offering will be used to initially reduce indebtedness under the Corporation’s revolving credit facilities, which will be subsequently redrawn and applied as needed to fund the Corporation’s ongoing exploration and development programs and for general working capital purposes.

The Offering is scheduled to close on or about June 14, 2013 and is subject to certain conditions including, but not limited to, completion of a satisfactory due diligence investigation by the Underwriters and the receipt of all necessary third party and regulatory approvals, including the approval of the Toronto Stock Exchange.

According to the prospectus:

The Preferred Shares, Series C will not be redeemable by the Corporation prior to June 30, 2018. On and after June 30, 2018, the Corporation may, at its option, upon not less than 30 days and not more than 60 days prior written notice, redeem for cash, all or any number of the outstanding Preferred Shares, Series C at $25.75 per share if redeemed before June 30, 2019, at $25.50 per share if redeemed on or after June 30, 2019 but before June 30, 2020 and at $25.00 per share if redeemed on or after June 30, 2020 (each, a “Redemption Price”), in each case together with all accrued and unpaid dividends (less any tax required to be deducted or withheld by Birchcliff) to but excluding the date fixed for redemption. See “Details of the Offering”.

The Preferred Shares, Series C will not be redeemable by the holders thereof prior to June 30, 2020. On and after June 30, 2020, a holder of Preferred Shares, Series C may, at its option, upon not less than 30 days prior written notice to the Corporation (the “Notice of Redemption”), redeem for cash, all or any number of Preferred Shares, Series C held by such holder on the last day of March, June, September and December of each year at $25.00 per share (being the then applicable Redemption Price), together with all accrued and unpaid dividends (less any tax required to be deducted or withheld by Birchcliff) to but excluding the date fixed for redemption. Upon receipt of the Notice of Redemption, the Corporation may, at its option (subject, if required, to stock exchange approval), upon not less than 20 days prior written notice, elect to convert such Preferred Shares, Series C into common shares (“Common Shares”) of the Corporation. The number of Common Shares into which each Preferred Share, Series C may be so converted will be determined by dividing the amount of $25.00 (being the then applicable Redemption Price) together with all accrued and unpaid dividends to but excluding the date fixed for conversion, by the greater of $2.00 and 95% of the weighted average trading price of the Common Shares on the Toronto Stock Exchange (the “TSX”) for a period of 20 consecutive trading days ending on the fourth day prior to the date specified for conversion, or, if that fourth day is not a trading day, on the immediately preceding trading day (the “Current Market Price”). See “Details of the Offering”.

On and after June 30, 2018, the Corporation may, at its option (subject, if required, to stock exchange approval), upon not less than 30 and not more than 60 days prior written notice, convert all or any number of the outstanding Preferred Shares, Series C into Common Shares. The number of Common Shares into which each Preferred Share, Series C may be so converted will be determined by dividing the then applicable Redemption Price, together with all accrued and unpaid dividends to but excluding the date fixed for conversion, by the greater of $2.00 and 95% of the Current Market Price. See “Details of the Offering”.

Also in the prospectus is:

The Preferred Shares, Series C and the Common Shares are not rated by any credit rating agency.

As there is no rating, the issue will not be tracked by HIMIPref™. As has been previously explained, this is not because I worship the rating agencies, but because a credit rating is a newsworthy item; downgrades will attract public attention which may serve to focus the directors’ attention on improving the situation in bad times.

Update, 2014-4-19: Trades as BIR.PR.C

Emera Incorporated has announced (although not yet on their website):

that it will issue four million Cumulative Redeemable First Preferred Shares, Series E (the “Series E Shares”) at a price of $25.00 per share, for aggregate gross proceeds of $100 million on a bought deal basis to a syndicate of underwriters in Canada led by RBC Capital Markets, CIBC, Scotiabank and TD Securities Inc. RBC Capital Markets and CIBC are acting as joint bookrunners for the offering.

Emera has granted to the underwriters an option, exercisable at any time up to 48 hours prior to the date of closing, to purchase up to an additional one million Series E Shares at the same offering price, for additional gross proceeds of up to $25 million.

The holders of Series E Shares will be entitled to receive fixed cumulative preferential cash dividends at an annual rate of $1.125 per share, payable quarterly, as and when declared by the board of directors of the Company yielding 4.5% per annum. The initial dividend, if declared, will be payable on August 15, 2013 and will be $0.2034 per share, based on an anticipated closing date of June 10, 2013.

The Series E Shares will not be redeemable by the Company prior to August 15, 2018. On or after August 15, 2018 the Company may redeem all or any part of the then outstanding Series E Shares, at the Company’s option without the consent of the holder, by the payment of: $26.00 per share if redeemed before August 15, 2019; $25.75 per share if redeemed on or after August 15, 2019 but before August 15, 2020; $25.50 per share if redeemed on or after August 15, 2020 but before August 15, 2021; $25.25 per share if redeemed on or after August 15, 2021 but before August 15, 2022; and $25.00 per share if redeemed on or after August 15, 2022, together, in each case, with all accrued and unpaid dividends up to but excluding the date fixed for redemption. The Series E Shares do not have a fixed maturity date and are not redeemable at the option of the holders of Series E Shares.

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.

The Series E Shares will be offered to the public in Canada by way of prospectus supplement to the Company’s short form base shelf prospectus dated May 2, 2013.

Update, 2013-6-10: Emera announced on June 4:

that in connection with its recently announced public offering of 4,000,000 Cumulative Redeemable First Preferred Shares, Series E (the “Series E Shares”), the underwriters have exercised their option (the “Underwriters’ Option”) to purchase an additional 1,000,000 Series E Shares at a price of $25.00 per share. Emera will receive additional gross proceeds of $25 million from the exercise of the Underwriters’ Option, increasing the total size of the offering to $125 million. Closing of the Underwriters’ Option is expected to occur concurrently with the scheduled closing of the public offering on June 10, 2013.

Brookfield Asset Management has announced:

that it has agreed to issue 6,000,000 4.9% perpetual Class A Preference Shares, Series 37 (“Preferred Shares, Series 37”) on a bought deal basis to a syndicate of underwriters led by CIBC, RBC Capital Markets, Scotiabank and TD Securities for distribution to the public. The Preferred Shares, Series 37 will be issued at a price of C$25.00 per share, for aggregate gross proceeds of C$150,000,000.

Brookfield has granted the underwriters an option, exercisable until 48 hours prior to closing, to purchase up to an additional 2,000,000 Preferred Shares, Series 37 which, if exercised, would increase the gross offering size to C$200,000,000. The Preferred Shares, Series 37 will be offered in all provinces of Canada by way of a supplement to Brookfield Asset Management’s existing short form base shelf prospectus dated June 7, 2011 as amended on June 13, 2012 and December 10, 2012.
…
Brookfield intends to use the net proceeds of the issue of Preferred Shares, Series 37 to redeem its Preferred Shares, Series 21 and, to the extent the underwriters’ option is exercised, for general corporate purposes. The offering of Preferred Shares, Series 37 is expected to close on or about June 13, 2013.

Enbridge Inc. has announced:

that it has entered into an agreement with a group of underwriters to sell 12 million cumulative redeemable preference shares, series 3 (the “Series 3 Preferred Shares”) at a price of C$25.00 per share for distribution to the public. The aggregate gross proceeds will be C$300 million. Closing of the offering is expected on June 6, 2013.

The holders of Series 3 Preferred Shares will be entitled to receive fixed cumulative dividends at an annual rate of $1.00 per share, payable quarterly on the 1st day of March, June, September and December, as and when declared by the Board of Directors of Enbridge, yielding 4.00 per cent per annum, for the initial fixed rate period to but excluding September 1, 2019. The first quarterly dividend payment date is scheduled for September 1, 2013. The dividend rate will reset on September 1, 2019 and every five years thereafter at a rate equal to the sum of the then five-year Canadian Government bond yield plus 2.38 per cent. The Series 3 Preferred Shares are redeemable by Enbridge, at its option, on September 1, 2019 and on September 1 of every fifth year thereafter.

The holders of Series 3 Preferred Shares will have the right to convert their shares into cumulative redeemable preference shares, series 4 (the “Series 4 Preferred Shares”), subject to certain conditions, on September 1, 2019 and on September 1 of every fifth year thereafter. The holders of Series 4 Preferred Shares will be entitled to receive quarterly floating rate cumulative dividends, as and when declared by the Board of Directors of Enbridge, at a rate equal to the sum of the then 90-day Government of Canada treasury bill rate plus 2.38 per cent.

Enbridge has granted to the underwriters an option, exercisable at any time up to 48 hours prior to the closing of the offering, to purchase up to an additional 2 million Series 3 Preferred Shares at a price of $25.00 per share.

The offering is being made only in Canada by means of a prospectus. Proceeds will be used to partially fund capital projects, to reduce existing indebtedness and for other general corporate purposes of the Corporation and its affiliates.

The syndicate of underwriters is co-led by TD Securities Inc., CIBC, RBC Capital Markets and Scotiabank.

Update, 2013-6-1:Rated Pfd-2(low) by DBRS.

Canadian Utilities Limited has announced:

it has entered into an agreement with a syndicate of underwriters co-led by RBC Capital Markets and BMO Capital Markets, and including TD Securities Inc., Scotiabank, CIBC, Canaccord Genuity Corp., and GMP Securities L.P. The underwriters have agreed to buy 6,000,000 4.50% Cumulative Redeemable Second Preferred Shares Series DD at a price of $25.00 per share for aggregate gross proceeds of $150,000,000. The proceeds will be used for capital expenditures, to repay indebtedness and for other general corporate purposes.

Canadian Utilities Limited has granted the underwriters an option to purchase at the offering price an additional
2,000,000 Series DD Preferred Shares exercisable in whole or in part at any time up to 7:00 AM (Calgary time) on the date that is two business days prior to closing. Should the option be fully exercised, the total gross proceeds of the Series DD Preferred Share offering will be $200,000,000.

The Series DD 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 as and when declared by the Board of Directors of the Corporation at an annual rate of $1.125 per share, to yield 4.50% annually. On or after September 1, 2018, the Corporation may redeem the Series DD Preferred Shares in whole or in part from time to time, at $26.00 per share if redeemed during the 12 months commencing September 1, 2018, at $25.75 per share if redeemed during the 12 months commencing September 1, 2019, at $25.50 per share if redeemed during the 12 months commencing September 1, 2020, at $25.25 per share if redeemed during the 12 months commencing September 1, 2021, and at $25.00 per share if redeemed on or after September 1, 2022.

The offering is being made only in the provinces of Canada by means of a prospectus supplement and the closing date of the issue is expected to be on or about May 15, 2013.

Update: Super-size me!:

Canadian Utilities Limited announced today that as a result of strong investor demand for its previously announced offering of Cumulative Redeemable Second Preferred Shares Series DD, the size of the offering has been increased to 9,000,000 shares. The aggregate gross proceeds will now be $225,000,000. The proceeds will be used for capital expenditures, to repay indebtedness and for other general corporate purposes.

In addition to the redemption of CGI.PR.B, Morgan Meighen & Associates has announced:

The Company further announced today that it has entered into an agreement with a syndicate of investment dealers led by Scotia Capital Inc. pursuant to which the syndicate has agreed to purchase 3,000,000 3.75% Cumulative Redeemable Class A Preference Shares, Series 4 of the Company (the “Series 4 Shares”) for gross proceeds of $75,000,000. The net proceeds of the offering, which is expected to close on May 30, 2013, will be used, together with available cash, to repay the short-term loan entered into to fund the redemption of the Series 2 Shares.

I am advised that this issue is retractible on or after June 15, 2023, for $25.00 cash. The issue may be called at $26.00 commencing June 15, 2018; the redemption price declines by 0.25 every June 15 until June 15, 2022; redeemable at 25.00 thereafter.

Angry pedants are advised that I consider this issue to be a Split Share because all of it’s credit quality is derived from an underlying investment portfolio; CGI is not an operating company.

Update, 2016-4-14: Trades as CGI.PR.D

Brookfield Renewable Energy Partners has announced:

that it has agreed to issue 5,000,000 5% perpetual Class A Preferred Shares, Series 6 (“Preferred Shares”) on a bought deal basis to a syndicate of underwriters led by Scotiabank, CIBC, RBC Capital Markets and TD Securities Inc. for distribution to the public. The Preferred Shares will be issued at a price of CDN$25.00 per share, for aggregate gross proceeds of CDN$125,000,000. The Preferred Shares are being issued through a wholly-owned subsidiary of, and are guaranteed by, Brookfield Renewable.

Brookfield Renewable has granted the underwriters an option, exercisable until 48 hours prior to closing, to purchase up to an additional 2,000,000 Preferred Shares which, if exercised, would increase the gross offering size to CDN$175,000,000.

The Preferred Shares will be offered to the public in Canada pursuant to a supplement to Brookfield Renewable’s existing short form base shelf prospectus dated January 23, 2012, that will be filed with securities regulatory authorities in each of the provinces and territories of Canada. The Preferred Shares may not be offered or sold in the United States or to U.S. persons absent registration or an applicable exemption from the registration requirements under the U.S. Securities Act.

The net proceeds of the issue will be used to repay outstanding indebtedness and for general corporate purposes. The offering of Preferred Shares is expected to close on or about May 1, 2013.