PrefBlog

TransCanada Corporation has announced:

that it does not intend to exercise its right to redeem its Cumulative Redeemable First Preferred Shares, Series 7 (Series 7 Shares) on April 30, 2019. As a result, subject to certain conditions, the holders of Series 7 Shares have the right to choose one of the following options with regard to their shares:
1.to retain any or all of their Series 7 Shares and continue to receive a fixed rate quarterly dividend; or

2.to convert, on a one-for-one basis, any or all of their Series 7 Shares into Cumulative Redeemable First Preferred Shares, Series 8 (Series 8 Shares) of TransCanada and receive a floating rate quarterly dividend.

The dividend rate applicable to the Series 7 Shares for the five-year period commencing on April 30, 2019 to, but excluding, April 30, 2024 will equal the Government of Canada five-year bond yield on April 1, 2019 plus 2.38 per cent. The dividend rate applicable to the Series 8 Shares for the three-month period commencing on April 30, 2019 to, but excluding, July 30, 2019 will equal the Government of Canada 90-day treasury bill rate on April 1, 2019 plus 2.38 per cent. Both rates will be calculated according to the terms of the prospectus supplement dated November 14, 2011, and announced by way of a news release on April 1, 2019.

Beneficial owners of Series 7 Shares who wish to exercise their right of conversion should communicate as soon as possible with their broker or other nominee and ensure that they follow their instructions in order to meet the deadline to exercise such right, which is 5 p.m. (EDT) on April 15, 2019. Any notices received after this deadline will not be valid. As such, it is recommended that this be done well in advance of the deadline in order to provide the broker or other intermediary with time to complete the necessary steps.

The foregoing conversions are subject to the conditions that: (i) if TransCanada determines that there would be less than one million Series 7 Shares outstanding after April 30, 2019, then all remaining Series 7 Shares will automatically be converted into Series 8 Shares on a one-for-one basis on April 30, 2019, and (ii) alternatively, if TransCanada determines that there would be less than one million Series 8 Shares outstanding after April 30, 2019, no Series 7 Shares will be converted into Series 8 Shares. In either case, TransCanada will issue a news release to that effect no later than April 23, 2019.

Beneficial owners of Series 7 Shares who do not provide notice or communicate with their broker or other nominee by the deadline will retain their Series 7 Shares and receive the new annual fixed dividend rate applicable to the Series 7 Shares, subject to the conditions stated above.

Holders of the Series 7 Shares and the Series 8 Shares will have the opportunity to convert their shares again on April 30, 2024, and every five years thereafter as long as the shares remain outstanding.

For more information on the terms of, and risks associated with an investment in the Series 7 Shares and the Series 8 Shares, please see the Corporation’s prospectus supplement dated November 14, 2011 which is available on sedar.com or on the Corporation’s website.

TRP.PR.D is a FixedReset, 4.00%+238, that commenced trading 2013-3-4 after being announced February 25 at $300-million and quickly monster-sized to $600-million.

I will have more to say about the conversion when the rate is announced on April 1.

This entry was posted on Friday, March 15th, 2019 at 5:20 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.