Pembina Pipeline Corporation ("Pembina" or the "Company") (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 3 ("Series 3 Shares")
(TSX: PPL.PR.C) on March 1, 2024.
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As a result of the decision not to redeem the Series 3 Shares,
and subject to certain terms of the Series 3 Shares, the holders of
the Series 3 Shares will have the right to elect to convert all or
part of their Series 3 Shares on a one-for-one basis into
Cumulative Redeemable Floating Rate Class A Preferred Shares,
Series 4 of Pembina ("Series 4 Shares") on March 1, 2024 (the
"Conversion Date"). Holders who do not exercise their right to
convert their Series 3 Shares into Series 4 Shares will retain
their Series 3 Shares.
As provided in the terms of the Series 3 Shares: (i) if Pembina
determines that there would remain outstanding immediately
following the conversion less than 1,000,000 Series 3 Shares, then
all remaining Series 3 Shares will be automatically converted into
Series 4 Shares on a one-for-one basis effective as of the
Conversion Date; or (ii) if Pembina determines that there would be
less than 1,000,000 Series 4 Shares outstanding immediately
following the conversion, no Series 3 Shares will be converted into
Series 4 Shares on the Conversion Date. There are currently
6,000,000 Series 3 Shares outstanding.
With respect to any Series 3 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 3 Shares for the five-year
period from and including March 1, 2024, to, but excluding, March
1, 2029, will be 6.019 percent, being equal to the five-year
Government of Canada bond yield of 3.419 percent determined as of
today plus 2.60 percent, in accordance with the terms of the Series
3 Shares.
With respect to any Series 4 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 applicable to the Series 4 Shares for the
three-month floating rate period from and including March 1, 2024,
to, but excluding, June 1, 2024, will be 7.631 percent, being equal
to the annual rate of interest for the most recent auction of
90-day Government of Canada treasury bills of 5.031 percent plus
2.60 percent, in accordance with the terms of the Series 4 Shares
(the "Floating Quarterly Dividend Rate"). The Floating Quarterly
Dividend Rate will be reset on the first day of March, June,
September and December in each year.
Beneficial holders of Series 3 Shares who wish to exercise their
right of conversion during the conversion period, which runs from
January 31, 2024, until 3:00 pm (MT) / 5:00 pm (ET) on February 15,
2024, should communicate as soon as possible with their broker or
other intermediary for more information. 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. Any notices received after this deadline will not
be valid.
As previously announced, the dividend payable on March 1, 2024,
to holders of the Series 3 Shares of record on February 1, 2024,
will be $0.279875 per Series 3 Share. For more information on the
terms of the Series 3 Shares and the Series 4 Shares, please see
the prospectus supplement dated September 25, 2013, which can be
found on SEDAR+ at www.sedarplus.ca.
About Pembina
Pembina Pipeline Corporation is a leading energy transportation
and midstream service provider that has served North America's
energy industry for more than 65 years. Pembina owns an integrated
network of hydrocarbon liquids and natural gas pipelines, gas
gathering and processing facilities, oil and natural gas liquids
infrastructure and logistics services, and an export terminals
business. Through our integrated value chain, we seek to provide
safe and reliable energy solutions that connect producers and
consumers across the world, support a more sustainable future and
benefit our customers, investors, employees and communities. For
more information, please visit www.pembina.com.
Purpose of Pembina: We deliver extraordinary energy solutions so
the world can thrive.
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 news release contains certain forward-looking information
and statements (collectively, "forward-looking statements"),
including 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 "continue", "anticipate",
"schedule", "will", "expects", "estimate", "potential", "planned",
"future", "outlook", "strategy", "protect", "trend", "commit",
"maintain", "focus", "ongoing", "believe" and similar expressions
suggesting future events or future performance.
In particular, this news release contains forward-looking
statements relating to, without limitation, the conversion rights,
future dividend rates and payment terms for the Series 3 Shares and
the Series 4 Shares. The forward-looking statements are based on
certain assumptions that Pembina has made in respect thereof as at
the date of this news release regarding, among other things: the
success of Pembina's operations and growth projects; prevailing
commodity prices, margins, volumes and exchange rates; that
Pembina's future results of operations will be consistent with past
performance and management expectations in relation thereto; the
availability of capital to fund future capital requirements
relating to existing assets and projects; future operating costs;
that all required regulatory and environmental approvals can be
obtained on the necessary terms in a timely manner; prevailing
regulatory, tax and environmental laws and regulations; maintenance
of operating margins; and the availability of coverage under
Pembina’s insurance policies (including in respect of Pembina’s
business interruption insurance policy).
Although Pembina believes the expectations and material factors
and assumptions reflected in these forward-looking statements are
reasonable as of the date hereof, there can be no assurance that
these expectations, factors and assumptions will prove to be
correct. 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: the
regulatory environment and decisions; Indigenous and landowner
consultation requirements; the impact of competitive entities and
pricing; reliance on third parties to successfully operate and
maintain certain assets; the strength and operations of the oil and
natural gas production industry and related commodity prices;
non-performance or default by counterparties to agreements which
Pembina or one or more of its affiliates has entered into in
respect of its business; actions by governmental or regulatory
authorities; the ability of Pembina to acquire or develop the
necessary infrastructure in respect of future development projects;
fluctuations in operating results; adverse general economic and
market conditions in Canada, North America and worldwide; risks
relating to inflation; the ability to access various sources of
debt and equity capital; changes in credit ratings; counterparty
credit risk; and certain other risks and uncertainties detailed in
Pembina's management's discussion and analysis and annual
information form, each for the year ended December 31, 2022, and
from time to time in Pembina's public disclosure documents
available at www.sedarplus.ca, www.sec.gov and through Pembina's
website at www.pembina.com.
This list of risk factors should not be construed as exhaustive.
Readers are cautioned that events or circumstances could cause
actual results to differ materially from those predicted,
forecasted or projected. The forward-looking statements contained
in this news release speak only as of the date hereof. 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 forward-looking statements
contained in this news release are expressly qualified by this
cautionary statement.
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For further information: Investor Relations (403) 231-3156
1-855-880-7404 e-mail: investor-relations@pembina.com
www.pembina.com
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