PrefBlog

Emera Incorporated has announced:

the applicable dividend rates for its Cumulative Rate Reset First Preferred Shares, Series A (the “Series A Shares”) and Cumulative Floating Rate First Preferred Shares, Series B (the “Series B Shares”), in each case, payable if, as and when declared by the Board of Directors of the Company:

2.182% per annum on the Series A Shares ($0.1364 per Series A Share per quarter), being equal to the sum of the Government of Canada bond yield as at July 16, 2020, plus 1.84%, payable quarterly on the 15th of February, May, August and November of each year during the five-year period commencing on August 15, 2020 and ending on (and inclusive of) August 14, 2025; and
2.021% on the Series B Shares for the three-month period commencing on August 15, 2020 and ending on (and inclusive of) November 14, 2020 ($0.1274 per Series B Share for the quarter), being equal to the sum of the three-month Government of Canada treasury bill yield rate as at July 16, 2020, plus 1.84% (calculated on the basis of the actual number of days elapsed during the quarter divided by 365), payable on the 15th of November 2020. The quarterly floating dividend rate will be reset every quarter.
Subject to certain conditions set out in the prospectus supplement of the Company dated May 26, 2010, to the short form base shelf prospectus of the Company dated May 19, 2010 (collectively, the “Prospectus”), on August 15, 2020 (the “Conversion Date”):

(a) The holders of Series A Shares have the right, at their option:

To retain any or all of their Series A Shares and continue to receive a fixed rate quarterly dividend; or
To convert any or all of their Series A Shares, on a one-for-one basis, into Series B Shares and receive a floating rate quarterly dividend, and
(b) The holders of Series B Shares have the right, at their option:

To retain any or all of their Series B Shares and continue to receive a floating rate quarterly dividend; or
To convert any or all of their Series B Shares, on a one-for-one basis, into Series A Shares and receive a fixed rate quarterly dividend.
The conversion of Series A Shares is subject to the conditions that: (i) if the Company determines, after having taken into account all shares tendered for conversion by holders of Series A Shares that there would remain outstanding on such Conversion Date less than 1,000,000 Series A Shares, such remaining number of Series A Shares will automatically be converted into Series B Shares on a one-for-one basis on such Conversion Date, and (ii) alternatively, if the Company determines that, after conversion, there would remain outstanding on such Conversion Date less than 1,000,000 Series B Shares, then no Series A Shares will be converted into Series B Shares.

The conversion of Series B Shares is subject to the conditions that: (i) if the Company determines, after having taken into account all shares tendered for conversion by holders of Series B Shares that there would remain outstanding on such Conversion Date less than 1,000,000 Series B Shares, such remaining number of Series B Shares will automatically be converted into Series A Shares on a one-for-one basis on such Conversion Date, and (ii) alternatively, if the Company determines that, after conversion, there would be outstanding on such Conversion Date less than 1,000,000 Series A Shares, then no Series B Shares will be converted into Series A Shares.

In either case, the Company will give written notice to that effect to the holders of Series A Shares and the holders of Series B Shares at least seven days prior to the Conversion Date.

Beneficial owners of Series A Shares or Series B Shares who wish to exercise their conversion right should communicate with their broker or other nominee to obtain instructions for exercising such right during the conversion period, which runs from July 16, 2020 until the deadline of 5:00 p.m. (Toronto Time) on July 31, 2020. 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 their broker or other nominee with adequate time to complete the necessary steps.

Holders of Series A Shares and Series B Shares will have the opportunity to convert their shares again on August 15, 2025 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 Series A Shares and Series B Shares, please see the Company’s Prospectus, which is available on www.sedar.com.

EMA.PR.A was issued as a FixedReset, 4.40%+184, that commenced trading 2010-6-2 after being announced 2010-5-25. Extension was announced in 2015 and a reset to 2.555% announced. I receommended against conversion, but there was a 36% conversion to EMA.PR.B anyway. Notice of extension was provided on 2020-7-9.

EMA.PR.B is a FloatingReset, Bills+184, that became extant in 2015 via a 36% conversion from EMA.PR.A.

This entry was posted on Saturday, July 18th, 2020 at 12:00 am 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.