PrefBlog

TransAlta Corporation has announced:

that it does not intend to exercise its right to redeem all or any part of the currently outstanding cumulative redeemable rate reset first preferred shares Series G (“Series G Shares”) (TSX: TA.PR.J) on September 30, 2024 (the “Conversion Date”).

As a result, the holders of the Series G Shares will have the right to convert all or any of their Series G Shares into cumulative redeemable floating rate first preferred shares Series H of the Company (“Series H Shares”) on the basis of one Series H Share for each Series G Share on the Conversion Date subject to the terms and conditions of the Series G Shares, including those described in the prospectus supplement dated August 8, 2014 relating to the issuance of the Series G Shares.

The dividend rate applicable to the Series G Shares for the 5-year period from and including September 30, 2024, to but excluding September 30, 2029, and the dividend rate applicable to the Series H Shares for the 3-month period from and including September 30, 2024, to but excluding December 31, 2024, will be determined and announced by the Company by way of a news release on September 3, 2024.

As provided in the terms of the Series G Shares, if TransAlta determines after reviewing all Series G Shares tendered for conversion into Series H Shares that: (i) there would remain outstanding on September 30, 2024, less than 1,000,000 Series G Shares, all remaining Series G Shares shall be converted automatically into Series H Shares on a one-for one basis effective September 30, 2024; or (ii) there would remain outstanding after September 30, 2024, less than 1,000,000 Series H Shares, the holders of Series G Shares shall not be entitled to convert their shares into Series H Shares effective September 30, 2024. There are currently 6,600,000 Series G Shares outstanding.

The Series G Shares are issued in “book entry only” form and must be purchased or transferred through a participant in the CDS depository service (“CDS Participant”). All rights of holders of Series G Shares must be exercised through CDS or the CDS Participant through which the Series G Shares are held. The deadline for the registered shareholder to provide notice of exercise of the right to convert Series G Shares into Series H Shares is 3:00 p.m. (MST) / 5:00 p.m. (EST) on September 16, 2024. Any notices received after this deadline will not be valid. As such, holders of Series G Shares who wish to exercise their right to convert their shares should contact their broker or other intermediary for more information and 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.

If TransAlta does not receive an election notice from a holder of Series G Shares during the time fixed therefore, then the Series G Shares shall be deemed not to have been converted (except in the case of an automatic conversion). Holders of the Series G Shares and the Series H Shares will have the opportunity to convert their shares again on September 30, 2029, and every five years thereafter as long as the shares remain outstanding.

The Toronto Stock Exchange (TSX) has conditionally approved the listing of the Series H Shares effective upon conversion.

Listing of the Series H Shares is subject to TransAlta fulfilling all the listing requirements of the TSX.

TA.PR.J was issued as a FixedReset, 5.30%+380, that commenced trading 2014-8-14 after being announced 2014-8-6. The issue reset at 4.988% effective September 30, 2019. I recommended against conversion and there was no conversion. The issue is tracked by HIMIPref™ and has been assigned to the Scraps index on credit concerns. It continues to be rated P-4(high by S&P but remains at Pfd-3(low) with DBRS.

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

This entry was posted on Friday, August 23rd, 2024 at 9:28 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.