AQN.PR.D Smacked on Light Volume

Algonquin Power & Utilities Corp. has announced:

the closing of the previously announced offering of Cumulative Rate Reset Preferred Shares, Series D (the “Series D Shares”). APUC issued a total of 4,000,000 Series D Shares at $25.00 per share for aggregate gross proceeds of $100 million.

The holders of the Series D Shares will be entitled to receive fixed cumulative dividends at an annual rate of $1.25 per share, payable quarterly, as and when declared by the board of directors of APUC. The Series D Shares will yield 5.00% per cent annually, for the initial period ending on March 31, 2019.

The offering was made on a bought deal basis through a syndicate of underwriters led by CIBC and TD Securities Inc.

The Series D Shares will commence trading on the Toronto Stock Exchange today, March 5, 2014, under the symbol AQN.PR.D.

The net proceeds of the offering will be used to partially finance certain of APUC’s previously disclosed growth opportunities, reduce amounts outstanding on APUC’s credit facilities and for general corporate purposes.

AQN.PR.D is a FixedReset, 5.00%+328, announced February 24. It will be tracked by HIMIPref™ but relegated to the Scraps subindex on credit concerns.

The issue traded 86,910 shares today in a range of 24.25-64 before closing at 24.26-38, 10×3. Vital statistics are:

Maturity Type : Limit Maturity
Maturity Date : 2044-03-05
Maturity Price : 22.88
Evaluated at bid price : 24.26
Bid-YTW : 5.03 %

2 Responses to “AQN.PR.D Smacked on Light Volume”

  1. adrian2 says:

    Not a surprise for Assiduous Readers:

    Not much of a new issue concession here! AQN.PR.A has an Issue Reset Spread of 294bp, which implies a future dividend yield of 4.64%, or $1.16 p.a. given a current five-year Canada rate of 1.70%. It’s trading at about $22.50, for a ‘future Current Yield’ of 5.16%, which is about 20bp MORE than the new issue … and the new issue has greater negative convexity, too.

    I say this issue is expensive.

    Previous issue AQN.PR.A is now bid @ $22.15

  2. jiHymas says:

    And you know what? At today’s close of 24.27, AQN.PR.D yields 5.03% to perpetuity; AQN.PR.A at 22.21 yields 5.18%. Looks like AQN.PR.D is still expensive, even after the smack-down.

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