CALGARY, May 2, 2019 /PRNewswire/ - Pembina Pipeline
Corporation ("Pembina") (TSX: PPL; NYSE:
PBA) announced today that it does not intend to exercise its
right to redeem the currently outstanding Cumulative Redeemable
Rate Reset Class A Preferred Shares, Series 5 ("Series 5 Shares")
(TSX: PPL.PR.E) on June 3, 2019 (the
"Conversion Date").
As a result, and subject to certain terms of the Series 5
Shares, the holders of the Series 5 Shares will have the right to
elect to convert all or any of their Series 5 Shares into
Cumulative Redeemable Floating Rate Class A Preferred Shares,
Series 6 of Pembina ("Series 6 Shares") on the basis of one Series
6 Share for each Series 5 Share on the Conversion Date.
Pursuant to the terms of the Series 5 Shares, as June 1, 2019, the required conversion date for
the Series 5 Shares, is not a business day, the actual conversion
date will be the next succeeding business day, being June 3, 2019.
With respect to any Series 5 Shares that remain outstanding
after the Conversion Date, holders thereof will be entitled to
receive quarterly fixed cumulative preferential cash dividends, if,
as and when declared by the Board of Directors of Pembina. The
annual dividend rate for the Series 5 Shares for the five-year
period from and including June 1,
2019 to, but excluding, June 1,
2024 will be 4.573%, being equal to the five-year Government
of Canada bond yield of 1.573%
determined as of today plus 3.00%, in accordance with the terms of
the Series 5 Shares.
With respect to any Series 6 Shares that may be issued on the
Conversion Date, holders thereof will be entitled to receive
quarterly floating rate cumulative preferential cash dividends, if,
as and when declared by the Board of Directors of Pembina. The
annual dividend rate for the 3-month floating rate period from and
including June 1, 2019 to, but
excluding, September 1, 2019 will be
4.666 %, being equal to the annual rate of interest for the most
recent auction of 90-day Government of Canada treasury bills of 1.666% plus 3.00%, in
accordance with the terms of the Series 6 Shares (the "Floating
Quarterly Dividend Rate"). The Floating Quarterly Dividend Rate
will be reset every quarter.
As provided in the terms of the Series 5 Shares: (i) if Pembina
determines that there would remain outstanding immediately
following the conversion less than 1,000,000 Series 5 Shares, all
remaining Series 5 Shares will be converted automatically into
Series 6 Shares on a one-for-one basis effective as of the
Conversion Date; or (ii) if Pembina determines that there would
remain outstanding immediately following the conversion less than
1,000,000 Series 6 Shares, holders of Series 5 Shares will not be
entitled to convert their Series 5 Shares into Series 6 Shares on
the Conversion Date. There are currently 10,000,000 Series 5 Shares
outstanding.
The Series 5 Shares are issued in "book entry only" form and, as
such, the sole registered holder of the Series 5 Shares is the
Canadian Depositary for Securities Limited ("CDS"). All rights of
holders of Series 5 Shares must be exercised through CDS or the CDS
participant through which the Series 5 Shares are held. The
deadline for the registered shareholder (CDS) to provide notice of
exercise of the right to convert Series 5 Shares into Series 6
Shares is 3:00 p.m. (MST) /
5:00 p.m. (EST) on May 17, 2019. Any notices received after this
deadline will not be valid. As such, holders of Series 5 Shares who
wish to exercise their right to convert their Series 5 Shares into
Series 6 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 the time to complete the necessary steps.
If Pembina does not receive an election notice from CDS during
the time fixed therefor, then the Series 5 Shares shall be deemed
not to have been converted (except in the case of an automatic
conversion). Holders of Series 5 Shares and Series 6 Shares will
have an opportunity to convert their shares again on June 1, 2024, and every five years thereafter as
long as the shares remain outstanding.
As previously announced, the dividend payable on June 3, 2019 to holders of the Series 5 Shares of
record on May 1, 2019 will be
$0.312500 per Series 5 Share,
consistent with the dividend rate in effect since the issuance of
the Series 5 Shares. For more information on the terms of, and
risks associated with an investment in, the Series
5 Shares and the Series 6 Shares, please see Pembina's
prospectus supplement dated January 9,
2014 which can be found on SEDAR at www.sedar.com.
About Pembina
Calgary-based Pembina Pipeline
Corporation is a leading transportation and midstream service
provider that has been serving North America's energy
industry for over 60 years. Pembina owns an integrated
system of pipelines that transport various hydrocarbon liquids and
natural gas products produced primarily in western Canada. The
Company also owns gas gathering and processing facilities and an
oil and natural gas liquids infrastructure and logistics
business. Pembina's integrated assets and commercial
operations along the majority of the hydrocarbon value chain allow
it to offer a full spectrum of midstream and marketing services to
the energy sector. Pembina is committed to identifying
additional opportunities to connect hydrocarbon production to new
demand locations through the development of infrastructure that
would extend Pembina's service offering even further
along the hydrocarbon value chain. These new developments will
contribute to ensuring that hydrocarbons produced in the Western
Canadian Sedimentary Basin and the other basins
where Pembina operates can reach the highest value
markets throughout the world.
Purpose of Pembina:
To be the leader in delivering integrated infrastructure
solutions connecting global markets;
- Customers choose us first for reliable and value-added
services;
- Investors receive sustainable industry-leading total
returns;
- Employees say we are the 'employer of choice' and value
our safe, respectful, collaborative and fair work culture; and
- Communities welcome us and recognize the net positive
impact of our social and environmental commitment.
Forward-Looking Information and Statements
This document contains certain forward-looking statements and
information (collectively, "forward-looking statements") within the
meaning of the "safe harbor" provisions of applicable securities
legislation that are based on Pembina's current expectations,
estimates, projections and assumptions in light of its experience
and its perception of historical trends. In some cases,
forward-looking statements can be identified by terminology such as
"intend", "will", "shall", and similar expressions suggesting
future events or future performance.
In particular, this news release contains forward-looking
statements and information relating to the conversion rights,
future dividend rates and payment terms for the Series 5 Shares and
the Series 6 Shares. 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: prevailing commodity prices, margins and
exchange rates, that Pembina's businesses will continue to achieve
sustainable financial results and that future results of operations
will be consistent with past performance and management
expectations in relation thereto, the availability and sources of
capital, operating costs, ongoing utilization and future
expansions, the ability to reach required commercial agreements,
and the ability to obtain required regulatory approvals. 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 and annual information form for the year
ended December 31, 2018, 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.
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SOURCE Pembina Pipeline Corporation
