TA.PR.F Closes at Slight Discount on Low Volume

TransAlta Corporation has announced:

it has completed its public offering of 11,000,000 Cumulative Redeemable Rate Reset First Preferred Shares, Series C (the “Series C Shares”) at a price of $25.00 per Series C Share.

The offering, previously announced on November 22, 2011, resulted in gross proceeds to TransAlta of $275 million. 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. TransAlta may invest funds that it does not immediately require in short term marketable debt securities.

The Series C Shares were offered to the Canadian public through a syndicate of underwriters led by CIBC World Markets Inc., RBC Capital Markets and Scotia Capital Inc. by way of a prospectus supplement that was filed with securities regulatory authorities in Canada under TransAlta’s short form base shelf prospectus dated November 15, 2011.

Holders of Series C Shares are entitled to receive a cumulative quarterly fixed dividend yielding 4.60% annually for the initial period ending June 30, 2017. Thereafter, the dividend rate will be reset every five years at a rate equal to the 5-year Government of Canada bond yield plus 3.10%. Holders of Series C Shares will have the right, at their option, to convert their shares into Cumulative Rate Reset First Preferred Shares, Series D (the “Series D Shares”), subject to certain conditions, on June 30, 2017 and on June 30 every five years thereafter. Holders of Series D 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 3.10%. The Series C Shares are listed on the Toronto Stock Exchange under the ticker symbol TA.PR.F.

TA.PR.F is a FixedReset, 4.60%+310, announced 2011-11-22. TA.PR.F will be tracked by HIMIPref™, but relegated to the Scraps index on credit concerns.

The issue traded 219,150 shares in a range of 24.85-95 today before closing at 24.87-92, 1×13. Vital statistics are:

Maturity Type : Limit Maturity
Maturity Date : 2041-11-30
Maturity Price : 23.08
Evaluated at bid price : 24.87
Bid-YTW : 4.50 %

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