/NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR
DISSEMINATION IN THE UNITED
STATES./
TORONTO, Dec. 6, 2021 /CNW/ - Chemtrade Logistics Income
Fund ("Chemtrade" or the "Fund") (TSX: CHE.UN) announced today a
public offering (the "Offering"), on a "bought deal" basis, of
$120 million principal amount of
convertible unsecured subordinated debentures, at a price of
$1,000 per debenture, with an
interest rate of 6.25% per annum, payable semi-annually in arrears
on the last day of February and August commencing on
August 31, 2022 (the "Debentures").
The Debentures will mature on August 31,
2027.
Chemtrade intends to redeem (the "Redemption") all of its 5.00%
convertible unsecured subordinated debentures due August 31, 2023 (the "2023 Debentures"), no later
than January 31, 2022. The 2023
Debentures are redeemable prior to maturity at the option of the
Fund for an amount equal to $1,000
for each $1,000 principal amount of
the 2023 Debentures plus accrued and unpaid interest up to but
excluding the redemption date. Chemtrade intends to provide a
formal notice of redemption to the holders of the 2023 Debentures
in accordance with the terms and conditions of the trust indenture
governing the 2023 Debentures, which will set out the price at
which the 2023 Debentures shall be redeemed as well as the
redemption date. As of the close of trading on December 3, 2021, the aggregate principal amount
of the 2023 Debentures outstanding was $143.75 million.
The net proceeds of the Offering, together with borrowings of up
to $30 million from the Fund's
existing credit agreement (the "Credit Facility"), are intended to
be used to fund the Redemption of the 2023 Debentures and, pending
any such use, will be used to repay indebtedness under the Credit
Facility.
The Offering is being made through a syndicate of underwriters
led by RBC Capital Markets, National Bank Financial Inc., BMO
Capital Markets, CIBC Capital Markets, Scotiabank, and TD
Securities Inc.
The Fund has also granted the underwriters the option to
purchase up to $18 million principal
amount of additional Debentures at a price of $1,000 per Debenture to cover over-allotments,
exercisable in whole or in part any time up to 30 days following
closing of the Offering.
The Debentures will be convertible at the holder's option into
fully paid and non-assessable freely tradeable Units at a
conversion price of $10.00 per Unit
(the "Conversion Price"). The Debentures will not be redeemable
before August 31, 2025. On or after
August 31, 2025 and prior to
August 31, 2026, the Debentures may
be redeemed in whole or in part from time to time at the option of
the Fund at par plus accrued and unpaid interest, if any, to but
excluding the date of redemption, provided that the volume weighted
average trading price of the Units on the TSX for the 20
consecutive trading days ending five trading days preceding the
date on which notice of redemption is given is not less than 125%
of the Conversion Price. On or after August
31, 2026, the Debentures may be redeemed at the option of
the Fund at any time at par plus accrued and unpaid interest, if
any, to but excluding the date of redemption.
The completion of the Offering is subject to normal regulatory
approvals, including approval of the TSX, and is expected to close
on or about December 15, 2021.
The Debentures will be offered in all of the provinces and
territories of Canada by way of a
shelf prospectus supplement to the Fund's base shelf prospectus
dated July 10, 2020 and may also be
offered to qualified institutional buyers pursuant to Rule 144A in
the United States.
The securities offered have not been registered under the U.S.
Securities Act of 1933, as amended, and may not be offered or sold
in the United States absent
registration or an applicable exemption from the registration
requirements. This news 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 offer, solicitation or sale of the securities in any
jurisdiction in which such offer, solicitation or sale would be
unlawful.
About Chemtrade
Chemtrade operates a diversified
business providing industrial chemicals and services to customers
in North America and around the
world. Chemtrade is one of North
America's largest suppliers of sulphuric acid, spent acid
processing services, inorganic coagulants for water treatment,
sodium chlorate, sodium nitrite, sodium hydrosulphite, and
phosphorus pentasulphide. Chemtrade is a leading regional supplier
of sulphur, chlor-alkali products, liquid sulphur dioxide and zinc
oxide. Additionally, Chemtrade provides industrial services such as
processing by-products and waste streams.
Caution Regarding Forward-Looking Statements
Certain statements contained in this news release constitute
forward-looking information within the meaning of certain
securities laws, including the Securities
Act (Ontario).
Forward-looking information can be generally identified by the use
of words such as "anticipate", "continue", "estimate", "expect",
"expected", "intend", "may", "will", "project", "plan", "should",
"believe" and similar expressions. Specifically, forward-looking
information in this news release include statements respecting
certain future expectations about: the Fund's ability to close the
Offering; the anticipated closing date of the Offering; the Fund's
intention to redeem all of its 2023 Debentures and the expected
manner of funding thereof, including borrowings from the Credit
Facility together with the net proceeds of the Offering.
Forward-looking statements in this news release describe the
expectations of the Fund and its subsidiaries as of the date
hereof. These statements are based on assumptions and involve known
and unknown risks, uncertainties and other factors that may cause
actual results or events to differ materially from those
anticipated in such forward-looking statements for a variety of
reasons, including without limitation the risks and uncertainties
detailed under the "Risk Factors" section of the Fund's latest
Annual Information Form and the "Risks and Uncertainties" section
of the Fund's most recent Management's Discussion &
Analysis.
Although the Fund believes the expectations reflected in these
forward-looking statements and the assumptions upon which they are
based are reasonable, no assurance can be given that actual results
will be consistent with such forward-looking statements, and they
should not be unduly relied upon. With respect to the
forward-looking statements contained in this news release, the Fund
has made assumptions regarding: the timing and completion of the
Redemption; there being no significant disruptions affecting the
operations of the Fund and its subsidiaries; the timely receipt of
required regulatory approvals; and global economic performance.
Except as required by law, the Fund does not undertake to update
or revise any forward-looking statements, whether as a result of
new information, future events or for any other reason. The
forward-looking information contained herein are expressly
qualified in their entirety by this cautionary statement.
Further information can be found in the disclosure documents
filed by the Fund with the securities regulatory authorities,
available at www.sedar.com.
SOURCE Chemtrade Logistics Income Fund