PrefBlog

Veresen Inc. has announced:

it has closed its previously announced bought deal offering of 8,000,000 Cumulative Redeemable Preferred Shares, Series A (“Series A Preferred Shares”) at a price of $25.00 per share (the “Offering”) for aggregate gross proceeds of $200 million. The previously announced underwriters’ option was exercised in full. The Series A Preferred Shares were offered to the public through a syndicate of underwriters with Scotiabank and TD Securities Inc. having been appointed as the bookrunners and including CIBC, RBC Capital Markets, BMO Capital Markets, National Bank Financial Inc., Canaccord Genuity Corp. and HSBC Securities (Canada) Inc.

The holders of Series A Preferred Shares will be entitled to receive fixed cumulative dividends at an annual rate of 4.40%, payable quarterly for an initial period up to but excluding September 30, 2017, as and when declared by the Board of Directors of Veresen. The first quarterly dividend of $0.4117 is scheduled for June 30, 2012. The dividend rate will reset on September 30, 2017 and every five years thereafter at a rate equal to the sum of the then five-year Government of Canada bond yield plus 2.92%. The Series A Preferred Shares are redeemable by Veresen, at its option, on September 30, 2017 and on September 30 of every fifth year thereafter.

Holders of Series A Preferred Shares will have the right to convert all or any part of their shares into Cumulative Redeemable Preferred Shares, Series B (“Series B Preferred Shares”), subject to certain conditions, on September 30, 2017, and on September 30 of every fifth year thereafter. The holders of Series B Preferred Shares will be entitled to receive quarterly floating rate cumulative dividends, as and when declared by the Board of Directors of Veresen, at a rate equal to the sum of the then 90-day Government of Canada treasury bill rate plus 2.92%.

The Series A Preferred Shares have been rated Pfd-3 (High) by DBRS Limited and P-3 (High) by Standard & Poor’s, a division of The McGraw Hill Companies, Inc. Net proceeds from the Offering will be used to reduce indebtedness, partially fund capital expenditures and for other general corporate purposes.

The Series A Preferred Shares are listed on the Toronto Stock Exchange under the symbol “VSN.PR.A”.

As noted, DBRS rates this Pfd-3(high).

VSN.PR.A is a FixedReset, 4.40%+292 announced February 3.

The issue traded 532,720 shares in a tight range of 25.05-14 today before closing at 25.05-07, 44×39. Vital statistics are:

VSN.PR.A will be tracked by HIMIPref™ but relegated to the Scraps index on credit concerns.

This entry was posted on Tuesday, February 14th, 2012 at 10:56 pm and is filed under Issue Comments. 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.