New Issue: VNR FixedReset 4.35%+281

Valener Inc. has announced:

that it has entered into an agreement with a syndicate of underwriters led by BMO Capital Markets and TD Securities Inc. (the “Underwriters”), under which the Underwriters have agreed to buy on a bought deal basis 3,000,000 Cumulative Rate Reset Preferred Shares, Series A, (the “Series A Preferred Shares”), at a price of $25.00 per Series A Preferred Share for gross proceeds of $75,000,000.

Valener has also granted the Underwriters an option to purchase an additional 450,000 Series A Preferred Shares at the same offering price for a period of 30 days following the closing of the offering. Should the Underwriters’ option be exercised fully, the total gross proceeds of the Series A Preferred Shares offering will be $86,250,00.

The Series A Preferred Shares will pay cumulative dividends of $1.0875 per share per annum, yielding 4.35% per annum, payable quarterly, for the initial period ending October 15, 2017. The initial dividend will be payable on October 15, 2012 and will be in the amount of $0.39031 per Series A Preferred Share, based on an anticipated closing date of June 6, 2012. The dividend rate will be reset on October 15, 2017 and every five years thereafter at a rate equal to the 5-year Government of Canada bond yield plus 2.81%. The Series A Preferred Shares will be redeemable by Valener on or after October 15, 2017, in accordance with their terms.

Holders of the Series A Preferred Shares will have the right, at their option, to convert their shares into Cumulative Floating Rate Preferred Shares, Series B, (the “Series B Preferred Shares”) subject to certain conditions, on October 15, 2017 and on October 15 every five years thereafter. Holders of the Series B Preferred 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 2.81%.

The net proceeds of the offering will be used by Valener to subscribe to additional units of Gaz Métro Limited Partnership (“Gaz Métro”) in order for Gaz Métro to finance part of its proposed acquisition of Central Vermont Public Service Corporation (the “CVPS Acquisition”) and any balance, for general corporate purposes. In the event the CVPS Acquisition does not proceed, Valener will use the net proceeds of the offering to repay amounts under its credit facility and for general corporate purposes.

The Series A Preferred Shares will be offered for sale to the public in each of the provinces and territories of Canada pursuant to a short form prospectus of Valener to be filed with Canadian securities regulatory authorities. The offering is scheduled to close on or about June 6, 2012, subject to certain conditions, including obtaining all necessary regulatory approvals.

Update: Provisional rating of Pfd-2(low) from DBRS.

Corporate Credit Rating of BBB+ for Valener from S&P.

One Response to “New Issue: VNR FixedReset 4.35%+281”

  1. […] is a FixedReset, 4.35%+281, announced May 15. The issue will be tracked by HIMIPref™ and assigned to the FixedResets […]

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