By Cristal Cody
Tupelo, Miss., Aug. 3 – Kinder Morgan Canada Ltd. priced C$200 million of cumulative redeemable rate reset preferred shares with a 5.25% annual dividend for the initial period to but excluding Nov. 15, 2022, according to a press release on Thursday.
The company sold 8 million shares of the series 1 preferred stock at C$25.00 per share.
The deal includes an over-allotment option of C$50 million, or 2 million shares.
Scotia Capital Inc., CIBC World Markets Inc., RBC Capital Markets (Canada) Ltd. and TD Securities Inc. were the lead managers.
The dividend rate will reset Nov. 15, 2022 and every five years thereafter at a rate equal to the Government of Canada bond yield plus 365 basis points, or in any event at a rate not less than 5.25% annually.
On Nov. 15, 2022 and on Nov. 15 every fifth year thereafter, Kinder Morgan Canada may redeem the preferred shares at C$25.00 per share, plus accrued and unpaid dividends.
Series 1 preferred shareholders will have the right to convert their shares into series 2 cumulative floating-rate preferred shares on Nov. 15, 2022 and on Nov. 15 every five years thereafter. Series 2 shareholders will be entitled to receive quarterly floating-rate dividends equal to the three-month Government of Canada Treasury bill yield plus 365 bps.
Proceeds from the offering will be used to indirectly subscribe for preferred units in Kinder Morgan Canada LP, which intends to use the proceeds to finance the development, construction and completion of the Trans Mountain expansion and base line terminal projects, as well as to fund future growth opportunities, to repay debt and for general corporate purposes.
Kinder Morgan is a Calgary, Alta.-based oil and refined petroleum products pipeline company.
| Issuer: | Kinder Morgan Canada Ltd.
|
| Amount: | C$200 million, 8 million preferred shares
|
| Greenshoe: | C$50 million, 2 million shares
|
| Maturity: | To but excluding Nov. 15, 2022
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| Securities: | Cumulative redeemable minimum rate reset preferred shares
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| Bookrunners: | Scotia Capital Inc., CIBC World Markets Inc., RBC Capital Markets (Canada) Ltd. and TD Securities Inc.
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| Dividend: | 5.25%; resets Nov. 15, 2022 and Nov. 15 every following fifth year at 365 bps over then five-year Government of Canada bond yield, or in any event at not less than 5.25%
|
| Price: | C$25.00 per share
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| Call feature: | Nov. 15, 2022 and Nov. 15 every fifth year thereafter at C$25.00 per share
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| Pricing date: | Aug. 3
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| Settlement date: | Aug. 15
|
| Distribution: | Canada
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