CALGARY, Alberta, March 1, 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 17 ("Series 17 Shares")
(TSX: PPL.PR.Q) on March 31, 2019
(the "Conversion Date").
As a result, and subject to certain terms of the Series 17
Shares, the holders of the Series 17 Shares will have the right to
elect to convert all or any of their Series 17 Shares into
Cumulative Redeemable Floating Rate Class A Preferred Shares,
Series 18 of Pembina ("Series 18 Shares") on the basis of one
Series 18 Share for each Series 17 Share on the Conversion
Date.
With respect to any Series 17 Shares that remain outstanding
after March 31, 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 17 Shares for
the five-year period from and including March 31, 2019 to, but excluding, March 31, 2024 will be 4.821%, being equal to the
five-year Government of Canada
bond yield of 1.811% determined as of today plus 3.01%, in
accordance with the terms of the Series 17 Shares.
With respect to any Series 18 Shares that may be issued on
March 31, 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 March 31, 2019 to, but excluding, June 30, 2019 will be 4.692%, being equal to the
annual rate of interest for the most recent auction of 90-day
Government of Canada treasury
bills of 1.682% plus 3.01%, in accordance with the terms of the
Series 18 Shares (the "Floating Quarterly Dividend Rate"). The
Floating Quarterly Dividend Rate will be reset every quarter.
As provided in the terms of the Series 17 Shares: (i) if Pembina
determines that there would remain outstanding immediately
following the conversion less than 1,000,000 Series 17 Shares, all
remaining Series 17 Shares will be converted automatically into
Series 18 Shares on a one-for-one basis effective March 31, 2019; or (ii) if Pembina determines
that there would remain outstanding immediately following the
conversion less than 1,000,000 Series 18 Shares, holders of Series
17 Shares will not be entitled to convert their Series 17 Shares
into Series 18 Shares on the Conversion Date. There are currently
6,000,000 Series 17 Shares outstanding.
The Series 17 Shares are issued in "book entry only" form and,
as such, the sole registered holder of the Series 17 Shares is
the Canadian Depositary for Securities Limited ("CDS"). All rights
of holders of Series 17 Shares must be exercised through CDS or the
CDS participant through which the Series 17 Shares are held.
Pursuant to the terms of the Series 17 Shares, CDS may provide
notice of exercise of the right to convert Series 17 Shares into
Series 18 Shares not earlier than the 30th day prior to,
but not later than 3:00 (MST) / 5:00 pm
(EST) on the 15th day preceding, the Series 17
conversion date, which is March 31,
2019. As the 15th day prior to the conversion
date for Series 17 Shares is March 16,
2019, which is not a business day, the deadline for CDS to
provide notice of exercise of the right to convert Series 17 Shares
into Series 18 Shares is 3:00 p.m.
(MST) / 5:00 p.m. (EST) on
March 15, 2019. Any notices received
after this deadline will not be valid. As such, holders of Series
17 Shares who wish to exercise their right to convert their Series
17 Shares into Series 18 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 17 Shares shall be deemed
not to have been converted (except in the case of an automatic
conversion). Holders of Series 17 Shares and Series 18 Shares will
have an opportunity to convert their shares again on March 31, 2024, and every five years thereafter
as long as the shares remain outstanding.
As previously announced, the dividend payable on April 1, 2019 to holders of the Series 17 Shares
of record on March 15, 2019 will be
$0.312500 per Series 17 Share,
consistent with the dividend rate in effect since issuance of the
Series 17 Shares on October 21, 2017.
For more information on the terms of the Series 17 Shares and
the Series 18 Shares, please see Pembina's articles of
amalgamation, including the share terms and shares in series
schedule attached thereto as Schedule "A", which were filed under
Pembina's profile on SEDAR at www.sedar.com on
October 2, 2017.
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.
Pembina's strategy is to:
- Preserve Value by providing safe, environmentally
conscious, cost-effective and reliable services;
- Diversify by providing integrated solutions which
enhance profitability and customer service;
- Implement Growth by pursuing projects or assets that are
expected to generate cash flow per share accretion and capture
long-life, economic hydrocarbon reserves; and
- Secure Global Markets by understanding what the world
needs, where they need it, and delivering it.
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 17 Shares
and the Series 18 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.
For further information: Investor Relations, Scott Arnold, (403) 231-3156, 1-855-880-7404,
e-mail: investor-relations@pembina.com, www.pembina.com