PrefBlog

Transalta Corporation has announced:

that it has agreed to issue to a syndicate of underwriters led by CIBC, RBC Capital Markets and Scotia Capital Inc. for distribution to the public 8,000,000 Cumulative Rate Reset First Preferred Shares, Series A (the “Series A Shares”). The Series A Shares will be issued at a price of $25.00 per Series A Share, for aggregate gross proceeds of $200 million. Holders of the Series A Shares will be entitled to receive a cumulative quarterly fixed dividend yielding 4.60% annually for the initial period ending March 31, 2016. Thereafter, the dividend rate will be reset every five years at a rate equal to the 5-year Government of Canada bond yield plus 2.03%.

Holders of Series A Shares will have the right, at their option, to convert their shares into Cumulative Rate Reset First Preferred Shares, Series B (the “Series B Shares”), subject to certain conditions, on March 31, 2016 and on March 31 every five years thereafter. Holders of the Series B 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 2.03%.

TransAlta Corporation has granted the underwriters an option, exercisable in whole or in part prior to closing, to purchase up to an additional 2,000,000 Series A Shares at the same offering price. The Series A Shares will be offered by way of prospectus supplement under the short form base shelf prospectus of TransAlta Corporation dated October 19, 2009. The prospectus supplement will be filed with securities regulatory authorities in all provinces of Canada.

The net proceeds of the offering will be used to partially fund capital projects, for other general corporate purposes and to reduce short term indebtedness of the Company and its affiliates, which short term indebtedness was used to fund the Company’s capital program and for general corporate purposes. The Company may invest funds that it does not immediately require in short term marketable debt securities. The offering is expected to close on or about December 10, 2010.

Update: The market says “Super-Size me!”

TransAlta Corporation (TSX:TA) (NYSE:TAC) has increased its previously announced bought deal financing to $250 million. TransAlta Corporation has agreed to issue to a syndicate of underwriters led by CIBC, RBC Capital Markets and Scotia Capital Inc. for distribution to the public 10,000,000 Cumulative Rate Reset First Preferred Shares, Series A (the “Series A Shares”). The Series A Shares will be issued at a price of $25.00 per Series A Share, for aggregate gross proceeds of $250 million.
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TransAlta Corporation has granted the underwriters an option, exercisable in whole or in part prior to closing, to purchase up to an additional 2,000,000 Series A Shares at the same offering price.

This entry was posted on Thursday, December 2nd, 2010 at 1:14 pm and is filed under New Issues. 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.