ALA.PR.K : Intent To Redeem

AltaGas Ltd. has announced:

that it has priced an offering of $300 million of 5.25% Fixed-to-Fixed Rate Subordinated Notes, Series 1 due January 11, 2082 (the “Offering”).

The Offering is expected to close on or about January 11, 2022. The Company intends to use the net proceeds of the offering to redeem or repurchase its outstanding cumulative redeemable five-year rate reset preferred shares, series K (TSX: ALA.PR.K).

The subordinated notes are being offered through a syndicate of underwriters, co-led by CIBC Capital Markets, BMO Capital Markets and RBC Capital Markets, under AltaGas’ short form base shelf prospectus dated February 22, 2021, as supplemented by a prospectus supplement dated January 5, 2022.

ALA.PR.K is a FixedReset, 5.00%+380M500, that commenced trading 2017-2-22 after being announced 2017-2-13. It is tracked by HIMIPref™ but relegated to the Scraps subindex on credit concerns.

Thanks to Assiduous Reader CanSiamCyp for bringing this to my attention!

Update, 2022-1-16: The sub-debt offering closed:

AltaGas Ltd. (“AltaGas” or the “Company”) (TSX: ALA) today announced that it has closed its previously announced offering of $300 million of 5.25% Fixed-to-Fixed Rate Subordinated Notes, Series 1 due January 11, 2082 (the “Offering”).

The Company intends to use the net proceeds of the offering to redeem or repurchase its outstanding cumulative redeemable five-year rate reset preferred shares, series K (TSX: ALA.PR.K). As a result of the Offering, based on current rates, AltaGas expects to save approximately $66 million in the initial ten-year term of the Offering due to lower taxes and financing charges. The Offering also continues to stagger, extend and de-risk AltaGas’ capital structure.

The subordinated notes are being offered through a syndicate of underwriters, co-led by CIBC Capital Markets, BMO Capital Markets and RBC Capital Markets, under AltaGas’ short form base shelf prospectus dated February 22, 2021, as supplemented by a prospectus supplement dated January 5, 2022.

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