PrefBlog

Kinder Morgan Canada Limited has announced:

that it has completed its previously announced offering of cumulative redeemable minimum rate reset preferred shares, Series 1 (the “Series 1 Preferred Shares”). The Company issued 12,000,000 Series 1 Preferred Shares for aggregate gross proceeds of $300 million through a syndicate of underwriters led by Scotiabank, CIBC Capital Markets, RBC Capital Markets and TD Securities. The transaction was upsized from a base size of 8,000,000 shares as a result of strong investor demand.

“This robust inaugural preferred offering is another testament to the attractiveness of KML’s integrated suite of assets,” said Dax Sanders, the Company’s Chief Financial Officer. “The transaction also represents another important step in financing the Trans Mountain Expansion Project.”

The Company intends to use the proceeds from the offering to indirectly subscribe for preferred units in Kinder Morgan Canada Limited Partnership, which in turn, intends to use such proceeds to, directly or indirectly, finance the development, construction and completion of the Trans Mountain Expansion project and Base Line Terminal project as well as in connection with other potential future growth opportunities, to repay indebtedness and for general corporate purposes.

The Series 1 Preferred Shares will begin trading today on the TSX under the symbol KML.PR.A. S&P and DBRS have assigned this series a rating of P-3 (high) and Pfd-3 (high), respectively. The outstanding principal amount of the series is expected to receive 50 percent equity treatment from S&P and 100 percent equity treatment from DBRS.
Dividends on the Series 1 Preferred Shares are expected to be $1.3125 per share annually, payable quarterly on the 15th day of February, May, August and November, as and when declared by the Board of Directors of the Company, for the initial fixed rate period to but excluding November 15, 2022. The first dividend, if declared, will be payable November 15, 2017, in the amount of $0.3308 per share.

All of the Company’s dividends are designated “eligible dividends” for Canadian income tax purposes.

KML.PR.A is a FixedReset 5.25%+365M525 announced August 3. It will be tracked by HIMIPref™ but relegated to the Scraps subindex on credit concerns.

The issue traded 714,130 shares today in a range of 24.89-00 before closing at 24.98-00. Vital statistics are:

DBRS finalized its Pfd-3(high) rating of the issue.

This entry was posted on Tuesday, August 15th, 2017 at 6:45 pm and is filed under Issue Comments. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.