{"id":46041,"date":"2023-11-21T22:36:43","date_gmt":"2023-11-22T03:36:43","guid":{"rendered":"https:\/\/prefblog.com\/?p=46041"},"modified":"2023-11-21T22:36:43","modified_gmt":"2023-11-22T03:36:43","slug":"ala-pr-e-to-be-redeemed","status":"publish","type":"post","link":"https:\/\/prefblog.com\/?p=46041","title":{"rendered":"ALA.PR.E To Be Redeemed"},"content":{"rendered":"

AltaGas Ltd. has announced<\/a>:<\/p>\n

its intention to redeem \u2013 in accordance with the terms of the Cumulative Redeemable 5-Year Rate Reset Preferred Shares, Series E (the “Series E Shares”) as set out in the Company’s articles \u2013 all of its 8,000,000 issued and outstanding Series E Shares on December 31, 2023 (the “Redemption Date”) for a redemption price equal to $25.00 per Series E Share, together with all accrued and unpaid dividends to, but excluding, the Redemption Date (the “Redemption Price”), less any tax required to be deducted or withheld by the Company.<\/p>\n

As outlined in the November 10, 2023 press release, AltaGas intends to use the net proceeds from the $200 million of 8.90% Fixed-to-Fixed Rate Subordinated Notes, Series 3 due November 10, 2083 to redeem or repurchase its outstanding Series E Shares.<\/p>\n

The Company has provided notice today of the Redemption Price and the Redemption Date to the sole registered holder of the Series E Shares in accordance with the terms of the Series E Shares as set out in the Company’s articles. Non-registered holders of Series E Shares should contact their broker or other intermediary for information regarding the redemption process for the Series E Shares in which they hold a beneficial interest. The Company’s transfer agent for the Series E Shares is Computershare Investor Services Inc. Questions regarding the redemption process may be directed to Computershare Investor Services Inc. at 1-800-564-6253 or by email to corporateactions@computershare.com.<\/p><\/blockquote>\n

This is a bit of an anticlimax, since they already announced the closing of an issuance of hybrid notes to fund it<\/a>:<\/p>\n

AltaGas Ltd. (“AltaGas” or the “Company”) (TSX: ALA) today announced that it has closed its previously announced offering of $200 million of 8.90% Fixed-to-Fixed Rate Subordinated Notes, Series 3 due November 10, 2083 (the “Offering”).<\/p>\n

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 E (TSX: ALA.PR.E) (the “Series E Preferred Shares). Series E Preferred Share dividends are not deductible for tax purposes and are subject to part 6.1 tax at 40 percent. As a result of the Offering, based on current rates, AltaGas expects to save approximately $10 million or $0.01 of annual earnings per share during the initial five-year term of the subordinated notes due to lower taxes and financing charges relative to what the reset rate would have been on the Series E Preferred Share dividends.<\/p>\n

The subordinated notes are being offered through a syndicate of underwriters, co-led by CIBC Capital Markets and RBC Capital Markets, under AltaGas’ short form base shelf prospectus dated March 31, 2023, as supplemented by a prospectus supplement dated November 7, 2023.<\/p><\/blockquote>\n

These subordinated\/hybrid notes look a lot like LRCNs but have a step-up in interest rate<\/a>, which would disqualify them from being Tier 1 Capital for banks and insurers<\/a>.<\/p>\n

ALA.PR.E was issued as a FixedReset, 5.00%+317, that commenced trading 2013-12-13<\/a> after being announced 2013-12-4<\/a>. The 2018-11-28 notice of extension<\/a> was reported on PrefBlog. The issue reset at 5.393% effective December 31, 2018<\/a>. I recommended against conversion<\/a> and there was no conversion<\/a>. The company announced earlier in November that it was considering redemption<\/a>. The issue is tracked by HIMIPref\u2122 but is relegated to the Scraps – FixedReset Discount subindex due to credit concerns.<\/p>\n

Thanks to Assiduous Reader CanSiamCyp<\/i> for bringing this to my attention<\/a>!<\/p>\n","protected":false},"excerpt":{"rendered":"

AltaGas Ltd. has announced: its intention to redeem \u2013 in accordance with the terms of the Cumulative Redeemable 5-Year Rate Reset Preferred Shares, Series E (the “Series E Shares”) as set out in the Company’s …<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[13],"tags":[],"class_list":["post-46041","post","type-post","status-publish","format-standard","hentry","category-issue-comments"],"_links":{"self":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/46041","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=46041"}],"version-history":[{"count":0,"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/46041\/revisions"}],"wp:attachment":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=46041"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=46041"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=46041"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}