Pembina Pipeline Corporation Announces Bought Deal Convertible Debenture Offering
/NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES/
All financial figures are in Canadian dollars.
CALGARY, Nov. 15 /CNW/ - Pembina Pipeline Corporation ("Pembina" or the "Corporation") (TSX: PPL, PPL.DB.B) announced today that it has entered into an agreement with a syndicate of underwriters led by Scotia Capital Inc. and including BMO Nesbitt Burns Inc., National Bank Financial Inc., TD Securities Inc., CIBC World Markets Inc., RBC Dominion Securities Inc., Canaccord Genuity Corp., FirstEnergy Capital Corp. and Peters & Co. Limited (collectively, the "Underwriters"), pursuant to which the Underwriters have agreed to purchase from Pembina on a "bought deal" basis and sell to the public $250,000,000 aggregate principal amount of convertible unsecured subordinated debentures (the "Debentures") at a price of $1,000 per Debenture (the "Offering").
Pembina has granted to the Underwriters an option, exercisable at any time up to 48 hours prior to the closing of the Offering, to purchase up to an additional 50,000 Debentures at a price of $1,000 per Debenture.
Pembina intends to use the net proceeds from the Offering to partially repay existing credit facilities, thereby making borrowing capacity available to fund a portion of the Corporation's capital expenditure program, including capital expenditures relating to the Corporation's growth projects, and for general corporate purposes. Pembina's current suite of growth projects include the construction of the Nipisi and Mitsue pipelines, the construction of an enhanced NGL extraction facility at the Cutbank complex, and projects that are expected to expand the transportation service options the Corporation can offer producers developing the Cardium oil formation located in central Alberta.
The Debentures will bear interest from the date of issue at 5.75% per annum, payable semi-annually in arrears on May 31 and November 30 each year commencing May 31, 2011. The Debentures will have a maturity date of November 30, 2020 (the "Maturity Date"). The Debentures will be convertible at the holder's option at any time prior to the close of business on the earlier of the Maturity Date and the business day immediately preceding the date specified by Pembina for redemption of the Debentures into fully paid and non-assessable common shares ("Common Shares") of Pembina at a conversion price of $28.55 per Common Share (the "Conversion Price"), being a conversion rate of approximately 35.0263 Common Shares for each $1,000 principal amount of Debentures.
The Debentures will not be redeemable by Pembina before November 30, 2014. On or after November 30, 2014 and prior to November 30, 2016, the Debentures may be redeemed in whole or in part from time to time at Pembina's option, provided that the volume weighted average trading price of the Common Shares on the TSX on the 20 consecutive trading days ending on the fifth trading day preceding the date on which the notice of the redemption is given is not less than 125% of the Conversion Price. On and after November 30, 2016, the Debentures may be redeemed in whole or in part from time to time at Pembina's option at a price equal to their principal amount plus accrued interest.
The Debentures will be offered pursuant to a prospectus supplement under the shelf prospectus filed by the Corporation on November 12, 2010 in each of the provinces of Canada. Closing of the Offering is expected to occur on or about November 24, 2010. The Offering is subject to customary conditions and receipt of regulatory approvals, including approval of the TSX.
Pembina Pipeline Corporation transports crude oil and natural gas liquids produced in Western Canada, owns and operates oil sands pipelines and has a growing presence in midstream and natural gas services sectors.
Forward-Looking Information and Statements
This news release contains certain forward-looking information and statements that are based on Pembina's current expectations, estimates, projections and assumptions in light of its experience and its perception of historical trends. In this news release, such forward-looking information and statements can be identified by terminology such as "to be", "expects", "projects" and similar expressions.
In particular, this news release contains forward-looking statements and information relating to the planned use of proceeds, Pembina's growth projects and timing for the Offering. These forward-looking statements and information are being made by Pembina based on certain assumptions that Pembina has made in respect thereof as at the date of this document, including: that favourable growth parameters continue to exist in respect of current and future growth projects (including the ability to finance such projects on favourable terms); and that Pembina's businesses will continue to achieve sustainable financial results. These forward-looking statements are not guarantees of future performance and are subject to a number of known and unknown risks and uncertainties, including, but not limited to: non-performance of agreements in accordance with their terms; the impact of competitive entities and pricing; reliance on key industry partners, alliances and agreements; the strength and operations of the oil and natural gas production industry and related commodity prices; the continuation or completion of third-party projects; regulatory environment and inability to obtain required regulatory approvals; tax laws and treatment; fluctuations in operating results; the ability of Pembina to raise sufficient capital to complete future projects and satisfy future commitments; construction delays; labour and material shortages; and certain other risks detailed from time to time in Pembina's public disclosure documents including, among other things, those detailed under the heading "Risk Factors" in Pembina's management's discussion and analysis for the year ended December 31, 2009, which can be found at www.sedar.com.
Accordingly, readers are cautioned that events or circumstances could cause results to differ materially from those predicted, forecasted or projected. Such forward-looking statements are expressly qualified by the above statements. Pembina does not undertake any obligation to publicly update or revise any forward-looking statements or information contained herein, except as required by applicable laws.
The Debentures offered hereby, and the Common Shares issuable upon conversion, redemption or maturity of the Debentures, have not been and will not be registered under the U.S. Securities Act of 1933, as amended, (the "U.S. Securities Act") or any state securities laws, and may not be offered or sold within the United States (as defined in Regulation S under the U.S. Securities Act), except in certain transactions exempt from the registration requirements of the U.S. Securities Act and applicable state laws, including transactions under Rule 144A under the U.S. Securities Act. This release shall not constitute an offer to sell, or the solicitation of an offer to buy securities in the United States, nor shall there be any sale of these securities in any jurisdictions in which such offer, solicitation or sale would be unlawful.
For further information: