Spectra Energy has announced:
Westcoast Energy Inc. (the “Corporation”) announced today that it has entered into an agreement with a syndicate of underwriters co-led by TD Securities Inc. and CIBC Capital Markets. The underwriters have agreed to buy 8 million Cumulative 5-Year Minimum Rate Reset Redeemable First Preferred Shares, Series 12 (the “Series 12 First Preferred Shares”) at a price of $25.00 per share for aggregate gross proceeds of $200,000,000. The proceeds are expected to be used to fund capital expenditures and for general corporate purposes.
The Corporation has granted the underwriters an option to purchase up to 2 million additional Series 12 First Preferred Shares at the offering price, exercisable until 48 hours prior to closing, which, if fully exercised, would increase the total gross proceeds of the Series 12 First Preferred Share offering to $250,000,000.
The Series 12 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 instalments for an initial period of five years, as and when declared by the Board of Directors of the Corporation, at a rate of $1.30 per share per annum, to yield 5.20% 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 4.52%, provided that, in any event, such rate shall not be less than 5.20%. On October 15, 2021, and on October 15 of every fifth year thereafter, the Corporation may redeem the Series 12 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 12 First Preferred Shares into an equal number of Cumulative Floating Rate Redeemable First Preferred Shares, Series 13 (the “Series 13 First Preferred Shares”) on October 15, 2021, and on October 15 of every fifth year thereafter. Holders of the Series 13 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 4.52%. On October 15, 2026, and on October 15 of every fifth year thereafter, the Corporation may redeem the Series 13 First Preferred Shares in whole or in part at par. On any other date after October 15, 2026, the Corporation may redeem the Series 13 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 under the Corporation’s short form base shelf prospectus dated March 18, 2016, and a prospectus supplement to such short form prospectus. The closing date of the offering is expected to be on or about August 30, 2016.
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.
They later announced:
that as a result of strong demand for its previously announced offering it has agreed to increase the size of the offering to 12 million Cumulative 5-Year Minimum Rate Reset Redeemable First Preferred Shares, Series 12 (the “Series 12 First Preferred Shares”) at a price of $25.00 per share for aggregate gross proceeds of $300,000,000. There will not be an underwriters’ option as was previously granted. The Series 12 Preferred Shares are being offered on a bought deal basis by a syndicate of underwriters co-led by TD Securities Inc. and CIBC Capital Markets.
The proceeds are expected to be used to fund capital expenditures and for general corporate purposes.
The offering is being made only in the provinces of Canada under the Corporation’s short form base shelf prospectus dated March 18, 2016, and a prospectus supplement to such short form prospectus. The closing date of the offering is expected to be on or about August 30, 2016.
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.
This creates an interesting tension with W.PR.K, which is a FixedReset, 5.25%+426M525, that commenced 2015-12-15 after having been announced 2015-11-24, in that the new issue has a significantly higher spread but a slightly lower guarantee.