Capstone Infrastructure Corporation Announces $75 Million Common Share Bought Deal Offering

NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE
UNITED STATES


Capstone Infrastructure Corporation (TSX:CSE)(TSX:CSE.PR.A)(TSX:CSE.DB.A) ("CSE"
or the "Corporation") today announced that it has agreed to issue, on a bought
deal basis, 12,000,000 common shares (the "Common Shares") at a price of $6.25
per Common Share, for aggregate gross proceeds of $75,000,000, to a syndicate of
underwriters co-led by TD Securities Inc. and RBC Capital Markets for
distribution to the public.


CSE has granted the underwriters an option to purchase up to an additional
1,800,000 Common Shares at the same offering price to cover over-allotments,
exercisable in whole or in part at any time until 30 days after closing, which,
if exercised in full, would increase the gross offering size to $86,250,000.


The net proceeds of the offering will be used by the Corporation to repay a
portion of the amount drawn on the senior credit facility used to fund the
Corporation's recent acquisition of a 70% indirect interest in Bristol Water, a
regulated water utility in the United Kingdom, thereby mitigating the risk
related to refinancing the senior credit facility while increasing the
Corporation's financial flexibility to pursue additional growth opportunities.
The Common Shares will be offered in all provinces and territories of Canada by
way of a short-form prospectus. The offering is expected to close on or about
November 10, 2011 and is subject to the receipt of Toronto Stock Exchange and
any other necessary regulatory approvals. 


"While our senior credit facility is cost effective and does not mature until
October 2012, we are pleased with this opportunity to establish permanent
financing," said Michael Bernstein, President and Chief Executive Officer. "In
addition, this offering of Common Shares bolsters our balance sheet while we
continue to evaluate attractive growth opportunities consistent with our
strategy to create value for shareholders."


The offering of Common Shares is expected to increase the Corporation's 2011
payout ratio, which is based on Adjusted Funds from Operations ("AFFO") and
excludes internalization costs, to 120% to 125% compared with the previously
provided outlook of approximately 120%. For 2012, the Corporation expects its
payout ratio to be consistent with the previously provided outlook of
approximately 85% to 90%. With this offering of Common Shares, the Corporation's
debt-to-capitalization ratio is expected to be less than 60% compared with the
previously provided outlook, based on full amount of the senior credit facility
outstanding, of more than 60%. 


Potential future sources of capital to refinance the balance of the senior
credit facility, which matures in October 2012, include proceeds from a future
recapitalization of Varmevarden, internally-generated cash flows of the
Corporation and the addition of holding company debt at Bristol Water.


This press release is not an offer of securities for sale in the United States.
The securities being offered have not been and will not be registered under the
United States Securities Act of 1933 and accordingly will not be offered, sold
or delivered, directly or indirectly within the United States, its possessions
and other areas subject to its jurisdiction or to, or for the account or for the
benefit of a U.S. person, except in limited circumstances.


About Capstone Infrastructure Corporation 

Capstone Infrastructure Corporation's mission is to build and responsibly manage
a high quality portfolio of infrastructure businesses in Canada and
internationally in order to deliver a superior total return to shareholders
through a combination of stable dividends and capital appreciation. The
Corporation's portfolio currently includes investments in gas cogeneration,
wind, hydro, biomass and solar power generating facilities, representing
approximately 370 MW of installed capacity, a 33.3% interest in a district
heating business in Sweden, and a 70% interest in a regulated water utility in
the United Kingdom. Please visit www.capstoneinfrastructure.com for more
information.


Notice to Readers 

This news release contains figures that are performance measures not defined by
International Financial Reporting Standards ("IFRS" or "GAAP"). These non-GAAP
performance measures do not have any standardized meaning prescribed by IFRS and
are, therefore, unlikely to be comparable to similar measures presented by other
issuers. The Corporation believes that these indicators are important since they
provide additional information about the Corporation's performance and cash
generating capabilities and facilitate comparison of results over different
periods. 


The Corporation uses AFFO as a measure of cash generated during the period for
distribution to shareholders. The Corporation defines AFFO as revenue less
operating expenses and administrative expenses plus interest and
dividends/distributions received from equity accounted investments, less
interest paid plus principal received from loans receivable on equity accounted
investments, less income taxes paid, less maintenance capital expenditures and
scheduled repayment of principal on debt. Payout ratio measures the proportion
of cash generated from operations that is paid as dividends. The payout ratio is
calculated as dividends declared divided by AFFO. 


Certain of the statements contained in this news release are forward-looking and
reflect management's expectations regarding the Corporation's future growth,
results of operations, performance and business based on information currently
available to the Corporation. Forward-looking statements are provided for the
purpose of presenting information about management's current expectations and
plans relating to the future and readers are cautioned that such statements may
not be appropriate for other purposes. These statements use forward-looking
words, such as "anticipate", "continue", "could", "expect", "may", "will",
"estimate", "believe" or other similar words, and include, among other things,
statements concerning the expected completion of the offering and timing
thereof, as well as the use of the proceeds from the offering. These statements
are subject to known and unknown risks and uncertainties that may cause actual
results or events to differ materially from those expressed or implied by such
statements and, accordingly, should not be read as guarantees of future
performance or results. The forward-looking statements in this news release are
based on information currently available and what the Corporation currently
believes are reasonable assumptions, including the material assumptions for each
of the Corporation's assets set out in its fiscal 2010 Annual Report under the
heading "Asset Performance", as updated in subsequently filed Quarterly
Financial Reports of the Corporation and other filings made by the Corporation
with the Canadian securities regulatory authorities (such documents are
available on the Canadian Securities Administrators' System for Electronic
Document Analysis and Retrieval ("SEDAR") at www.sedar.com). Other material
factors or assumptions that were applied in formulating the forward-looking
statements contained herein include the assumption that the business and
economic conditions affecting the Corporation's operations will continue
substantially in their current state, including, with respect to industry
conditions, general levels of economic activity, regulations, weather, taxes and
interest rates, and that there will be no unplanned material changes to the
Corporation's facilities, equipment or contractual arrangements.  


Although the Corporation believes that it has a reasonable basis for the
expectations reflected in these forward-looking statements, actual results may
differ from those suggested by the forward-looking statements for various
reasons, including risks related to: power infrastructure (operational
performance; power purchase agreements; fuel costs and supply; contract
performance; development risk; technology risk; default under credit agreements;
land tenure and related rights; regulatory regime and permits; environmental,
health and safety; climate change and the environment; and force majeure), the
Corporation (tax-related risks; variability and payment of dividends, which are
not guaranteed; geographic concentration and non-diversification; insurance;
environmental, health and safety regime; availability of financing; shareholder
dilution; and the unpredictability and volatility of the common share price of
the Corporation) and failure to complete the offering of Common Shares. There
are also a number of risks related to the Corporation's investment in
Varmevarden, the district heating business in Sweden, including: general
business risks inherent in the district heating business; geographic
concentration; minority interest; government regulation; termination of supply
and customer contracts; enforcement of indemnities against the vendors of
Varmevarden; environmental health and safety liabilities; liability and
insurance; and reliance on key personnel. There is also a risk that Varmevarden
may not achieve expected results. There are also a number of risks related to
Bristol Water's business, including: default under the Corporation's senior
credit facility; Bristol Water's revenue is substantially influenced by price
determinations made by the UK Water Services Regulatory Authority ("Ofwat");
Bristol Water's capital investment programs; Bristol Water's leakage targets;
Ofwat's introduction of the service incentive mechanism and its serviceability
assessment of Bristol Water; the economic environment, inflation and capital
market conditions; pension plan obligations; legal and regulatory risk;
increased competition; operational risks; foreign exchange; reliance on key
personnel; enforcement of indemnities against the vendor of Bristol Water;
default under Bristol Water's Artesian loans, bonds, debentures and credit
facility; geographic concentration; and seasonality.


For a more comprehensive description of these and other possible risks, please
see the Corporation's Annual Information Form dated March 24, 2011 for the year
ended December 31, 2010 as updated in subsequently filed Quarterly Financial
Reports and other filings made by the Corporation with the Canadian securities
regulatory authorities. These filings are available on SEDAR. The assumptions,
risks and uncertainties described above are not exhaustive and other events and
risk factors could cause actual results to differ materially from the results
and events discussed in the forward-looking statements. These forward-looking
statements reflect current expectations of the Corporation as at the date of
this news release and speak only as at the date of this news release. Except as
may be required by law, the Corporation does not undertake any obligation to
publicly update or revise any forward-looking statements.
Capstone Infrastructure (TSX:CSE.PR.A)
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