TA.PR.D / TA.PR.E : 15% Conversion to FloatingReset

TransAlta Corporation has announced:

that 1,824,620 of its 12,000,000 Cumulative Redeemable Rate Reset Preferred Shares, Series A (the “Series A Shares”) were tendered for conversion, on a one-for-one basis, into Cumulative Redeemable Floating Rate Preferred Shares, Series B (the “Series B Shares”) after having taken into account all election notices following the March 16, 2016 conversion deadline. As a result of the conversion, TransAlta will have 10,175,380 Series A Shares and 1,824,620 Series B Shares issued and outstanding. The Series A Shares will continue to be listed on the Toronto Stock Exchange (TSX) under the symbol TA.PR.D. The Series B Shares will begin trading on the TSX on March 31, 2016 under the symbol TA.PR.E, subject to the Company fulfilling all the listing requirements of the TSX.

The Series A Shares will pay fixed cumulative preferential cash dividends on a quarterly basis, for the five-year period from and including March 31, 2016 to but excluding March 31, 2021, if, as and when declared by the Board of Directors of TransAlta based on an annual fixed dividend rate of 2.709%.

The Series B Shares will pay quarterly floating rate cumulative preferential cash dividends for the five-year period from and including March 31, 2016 to but excluding March 31, 2021, if, as and when declared by the Board of Directors of TransAlta. The annual dividend rate for the Series B Shares for the 3-month floating rate period from and including March 31, 2016 to but excluding June 30, 2016 is 2.492% and will be reset every quarter.

Assiduous Readers will remember that TA.PR.D will reset to 2.709%, while the FloatingReset issue, TA.PR.E, will pay 3-Month T-Bills + 203bp, reset quarterly. I recommended against conversion.

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