Spectra Energy has announced that its subsidiary:
Westcoast Energy Inc. (the “Corporation”) announced today that it has entered into an agreement with a syndicate of underwriters co-led by BMO Capital Markets and Scotiabank. The underwriters have agreed to buy 4,000,000 Cumulative 5-Year Minimum Rate Reset Redeemable First Preferred Shares, Series 10 (the “Series 10 First Preferred Shares”) at a price of $25.00 per share for aggregate gross proceeds of $100,000,000. The proceeds are expected to be used to refinance upcoming debt maturities and for general corporate purposes.
Westcoast Energy Inc. has granted the underwriters an option to purchase at the offering price an additional 15% of the Series 10 First Preferred Shares exercisable in whole or in part at any time up to 30 days following closing to cover over-allotments, if any. Should the option be fully exercised, the total gross proceeds of the Series 10 First Preferred Share offering will be $115,000,000.
The Series 10 First Preferred Shares will be issued to the public at a price of $25.00 per share and holders will be entitled to receive fixed cumulative preferential cash dividends, payable by quarterly installments for an initial period of five years, as and when declared by the Board of Directors of the Corporation, at a rate of $1.3125 per share per annum, to yield 5.25% annually. Thereafter, the dividend rate will reset every five years to the sum of the then current 5-Year Government of Canada Bond yield and 4.26%, provided that, in any event, such rate shall not be less than 5.25%. On January 15, 2021, and on January 15 of every fifth year thereafter, the Corporation may redeem the Series 10 First Preferred Shares in whole or in part at par.
Holders will have the right to elect to convert all or any of their Series 10 First Preferred Shares into an equal number of Cumulative Floating Rate Redeemable First Preferred Shares, Series 11 (the “Series 11 First Preferred Shares”) on January 15, 2021, and on January 15 of every fifth year thereafter. Holders of the Series 11 First Preferred Shares will be entitled to receive quarterly floating rate cumulative preferential cash dividends, as and when declared by the Board of Directors of the Corporation, equal to the sum of the then current 3-month Government of Canada Treasury Bill yield and 4.26%. On January 15, 2026 and on January 15, of every fifth year thereafter, the Corporation may redeem the Series 11 First Preferred Shares in whole or in part at par. On any other date after January 15, 2026, the Corporation may redeem the Series 11 First Preferred Shares in whole or in part by the payment of $25.50 for each share to be redeemed.
The offering is being made only in the provinces of Canada by means of a short form prospectus. The closing date of the offering is expected to be on or about December 15, 2015.