W.PR.K Closes Better Than Expected On Disappointing Volume

Westcoast Energy Inc. has announced:

that it has closed its previously announced public offering (the “Offering”) of Cumulative 5-Year Minimum Rate Reset Redeemable First Preferred Shares, Series 10 (the “Series 10 First Preferred Shares”). The Offering was conducted through a syndicate of underwriters co-led by BMO Capital Markets and Scotiabank (collectively, the “Underwriters”).

In connection with closing, the Underwriters exercised the previously granted option (the “Over-Allotment Option”) to purchase an additional 15% of the Series 10 First Preferred Shares at the offering price. As a result of the exercise in full of the Over-Allotment Option, the Corporation issued 4,600,000 Series 10 First Preferred Shares at a price of $25.00 per share for total gross proceeds of $115,000,000. The Series 10 First Preferred Shares will begin trading on the TSX today under the symbol W.PR.K. The proceeds are expected to be used to refinance upcoming debt maturities and for general corporate purposes.

The Series 10 First Preferred Shares were offered only in the provinces of Canada by means of a short form prospectus of the Corporation dated December 7, 2015.

This news release does not constitute an offer to sell securities, nor is it a solicitation of an offer to buy securities, in any jurisdiction. All sales will be made through registered securities dealers in jurisdictions where the offering has been qualified for distribution.

Westcoast Energy Inc. is an indirect subsidiary of Spectra Energy Corp.

W.PR.K is a FixedReset, 5.25%+426M525, announced November 24. At the close on November 24, the TXPL Total Return Index Value was 802.86; at the close December 15, this index stood at 746.11, a decline of about 7.1%. By that standard, the decline of less than 4% in W.PR.K from issue price looks pretty good! Purists will object that TXPL contains a lot of junk and W.PR.K is investment grade (at least, according to DBRS); purists will also object that W.PR.K has a floor on reset and is therefore even less comparable with the index. Purists can suck eggs.

The issue will be tracked by HIMIPref™ and has been assigned to the FixedReset subindex.

The issue traded 241,305 shares in a range of 23.75-37 before closing at 24.10-15, 19×9. Vital statistics are:

Maturity Type : Limit Maturity
Maturity Date : 2045-12-15
Maturity Price : 22.81
Evaluated at bid price : 24.10
Bid-YTW : 5.41 %

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