CALGARY, Alberta, Nov. 1, 2019 /CNW/ - 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 7 ("Series 7 Shares")
(TSX: PPL.PR.G) on December 2, 2019
(the "Conversion Date").
As a result, and subject to certain terms of the Series 7
Shares, the holders of the Series 7 Shares will have the right to
elect to convert all or any of their Series 7 Shares into
Cumulative Redeemable Floating Rate Class A Preferred Shares,
Series 8 of Pembina ("Series 8 Shares") on the basis of one Series
8 Share for each Series 7 Share on the Conversion Date.
Pursuant to the terms of the Series 7 Shares, as December 1, 2019, the conversion date for the
Series 7 Shares, is not a business day, the actual conversion date
will be the next succeeding business day, December 2, 2019.
With respect to any Series 7 Shares that remain outstanding
after December 2, 2019, 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 7
Shares for the five-year period from and including December 1, 2019 to, but excluding, December 1, 2024 will be 4.38%, being equal to
the five-year Government of Canada
bond yield of 1.44% determined as of today plus 2.94%, in
accordance with the terms of the Series 7 Shares.
With respect to any Series 8 Shares that may be issued on
December 2, 2019, 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 December 1, 2019 to, but excluding, March 1, 2020 will be 4.602%, being equal to the
annual rate of interest for the most recent auction of 90-day
Government of Canada treasury
bills of 1.662% plus 2.94%, in accordance with the terms of the
Series 8 Shares (the "Floating Quarterly Dividend Rate"). The
Floating Quarterly Dividend Rate will be reset every quarter.
As provided in the terms of the Series 7 Shares: (i) if Pembina
determines that there would remain outstanding immediately
following the conversion less than 1,000,000 Series 7 Shares, all
remaining Series 7 Shares will be converted automatically into
Series 8 Shares on a one-for-one basis effective December 2, 2019; or (ii) if Pembina determines
that there would remain outstanding immediately following the
conversion less than 1,000,000 Series 8 Shares, holders of Series 7
Shares will not be entitled to convert their Series 7 Shares into
Series 8 Shares on the Conversion Date. There are currently
10,000,000 Series 7 Shares outstanding.
The Series 7 Shares are issued in "book entry only" form and, as
such, the sole registered holder of the Series 7 Shares is the
Canadian Depositary for Securities Limited ("CDS"). All rights of
holders of Series 7 Shares must be exercised through CDS or the CDS
participant through which the Series 7 Shares are held. The
deadline for the registered shareholder (CDS) to provide notice of
exercise of the right to convert Series 7 Shares into Series 8
Shares is 3:00 p.m. (MT) /
5:00 p.m. (ET) on November 15, 2019. Any notices received after
this deadline will not be valid. As such, holders of Series 7
Shares who wish to exercise their right to convert their Series 7
Shares into Series 8 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 7 Shares shall be deemed
not to have been converted (except in the case of an automatic
conversion). Holders of Series 7 Shares will have an opportunity to
convert their shares again on December 1,
2024, and every five years thereafter as long as the shares
remain outstanding.
As previously announced, the dividend payable on December 2, 2019 to holders of the Series 7
Shares of record on November 1, 2019
will be $0.281250 per Series 7 Share,
consistent with the dividend rate in effect since issuance of the
Series 7 Shares. For more information on the terms of the Series
7 Shares and the Series 8 Shares, please see Pembina's
prospectus supplement dated September 4,
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 65 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; an oil and natural gas liquids
infrastructure and logistics business; is growing an export
terminals business; and is currently constructing a petrochemical
facility to convert propane into polypropylene. 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.
Pembina is structured into three Divisions: Pipelines
Division, Facilities Division and Marketing & New Ventures
Division.
Pembina's common shares trade on
the Toronto and New York stock exchanges under
PPL and PBA, respectively. For more information,
visit www.pembina.com.
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 7 Shares and
the Series 8 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.
Investor Relations: Scott Arnold,
(403) 231-3156, 1-855-880-7404, e-mail:
investor-relations@pembina.com, www.pembina.com