KML.PR.C Settles Firm On Decent Volume

Kinder Morgan Canada Limited has announced:

that it has completed its previously announced offering of cumulative redeemable minimum rate reset preferred shares, Series 3 (the “Series 3 Preferred Shares”) for aggregate gross proceeds of $250 million. The Company issued 10,000,000 Series 3 Preferred Shares, including 2,000,000 Series 3 shares issued as a result of the full exercise of the underwriter’s option, through a syndicate of underwriters led by CIBC Capital Markets, Scotiabank, RBC Capital Markets and TD Securities.

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 potential future growth opportunities, to repay indebtedness and for general corporate purposes.
The Series 3 Preferred Shares will begin trading today on the TSX under the symbol KML.PR.C. S&P and DBRS have assigned this series a rating of P-3 (High) and Pfd-3 (high), respectively.

Dividends on the Series 3 Preferred Shares are expected to be $1.3000 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 February 15, 2023. The first dividend, if declared, will be payable February 15, 2018, in the amount of $0.22082 per share.

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

KML.PR.C is a FixedReset, 5.20%+351M520, announced 2017-12-6. It will be tracked by HIMIPref™ but relegated to the Scraps subindex on credit concerns.

The issue traded 508,130 shares today in a range of 24.94-00 before closing at 24.99-00. Vital statistics are:

Maturity Type : Limit Maturity
Maturity Date : 2047-12-15
Maturity Price : 23.15
Evaluated at bid price : 24.99
Bid-YTW : 5.13 %

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