Capstone Infrastructure Corporation has announced:
it has agreed to issue, on a bought deal basis, 3,000,000 Cumulative 5-Year Rate Reset Preferred Shares, Series A (the “Series A Shares”) at a price of $25.00 per Series A Share, for aggregate gross proceeds of $75,000,000, to a syndicate of underwriters co-led by TD Securities Inc., Macquarie Capital Markets Canada Ltd. and RBC Capital Markets for distribution to the public.
Capstone has granted the underwriters an option to purchase up to an additional 450,000 Series A Shares at $25.00 per Series A Share to cover over-allotments, exercisable in whole or in part at any time until 30 days after closing, which, if exercised in full, would increase the gross offering size to $86,250,000.
Holders of the Series A Shares will be entitled to receive a cumulative quarterly fixed dividend yielding 5.0% annually for the initial period ending July 31, 2016. Thereafter, the dividend rate will be reset every five years at a rate equal to the then current 5-year Government of Canada bond yield plus 2.71%.
Holders of Series A Shares will have the right, at their option, to convert their shares into Cumulative Floating Rate First Preferred Shares, Series B (the “Series B Shares”), subject to certain conditions and the Corporation’s right to redeem the Series A Shares as described below, on July 31, 2016 and on July 31 every five years thereafter. Holders of the Series B Shares will be entitled to receive cumulative quarterly dividends at a rate set quarterly equal to the then current three-month Government of Canada Treasury Bill yield plus 2.71%.
Holders of Series B Shares may convert their Series B Shares into Series A Shares, subject to certain conditions and the Corporation’s right to redeem the Series B Shares as described below, on July 31, 2021 and on July 31 every five years thereafter.
The Series A Shares will not be redeemable prior to July 31, 2016. On July 31, 2016 and on July 31 every five years thereafter, the Corporation may, subject to certain conditions, redeem all or any part of the Series A Shares at a cash redemption price per share of $25.00 together with all declared and unpaid dividends. The Corporation may redeem all or any part of the Series B Shares at a cash redemption price per share of $25.00 together with all declared and unpaid dividends in the case of redemptions on July 31, 2021 and on July 31 every five years thereafter or $25.50 together with all declared and unpaid dividends in the case of redemptions on any other date after July 31, 2016.
Standard & Poor’s, a division of the McGraw Hill Companies, Inc. (“S&P”), has assigned a preliminary rating of P-3 for the Series A Shares.
The net proceeds of the offering will be used to fund the Corporation’s final equity commitment to the Amherstburg solar power facility, to fund future potential acquisitions and for general corporate purposes. The Series A Shares will be offered in all provinces and territories of Canada by way of a short-form prospectus. The offering is expected to close on or about June 30, 2011 and is subject to the receipt of all necessary regulatory approvals.
Great! A junk FixedReset to fund solar power! I was hoping for one of these … not.
[…] is a 5.00%+271 FixedReset announced June 13. The issue traded 13,150 shares in a range of 24.00-75 before closing at 24.00-20, […]