Capital Power Corporation Preferred Shares

5.75% Cumulative Minimum Rate Reset Preference Shares, Series 11

Toronto Stock Exchange (TSX) ticker symbol: CPX.PR.K
Date of TSX Listing: May 16, 2019
Shares Outstanding: 6,000,000
CUSIP: 14042M847

 

Summary

Issue Description Ticker Symbol Par Dividend per Share per Annum Dividend Payable Dates Key Terms
Series 11 Cumulative
Minimum
Rate Reset
CPX.PR.K $25.00 $1.4375 Last business day of March, June, September and December Dividend rate will be reset on June 30, 2024 and every five years thereafter at a rate equal to the sum of the then five-year Government of Canada bond yield and 4.15%, provided that, in any event, such rate shall not be less than 5.75%. The Series 11 Shares are redeemable by Capital Power, at its option, on June 30, 2024 and every five years thereafter.

 

Dividends Declared

Declaration Date Record Date Dividend Payment Date Dividend Amount per Share
October 25, 2019 December 16, 2019 December 31, 2019 $0.359375
July 29, 2019 September 17, 2019 September 30, 2019 $0.359375
May 16, 2019 ​June 17, 2019 ​June 28, 2019 ​$0.17721

The initial quarterly dividend on the Series 11 Cumulative Minimum Rate Reset Preference Shares represents the time period from when the initial share offering closed on May 16, 2019 to June 30, 2019. Future quarterly dividends, if declared, will be $0.359375 per quarter or $1.4375 per annum for the initial five-year period ending June 30, 2024.

 

Excerpt from Prospectus Supplement

The holders of the Series 11 Shares will be entitled to receive fixed cumulative preferential cash dividends, if, as and when declared by the board of directors of the Company (the “Board of Directors”), payable quarterly on the last business day of each of March, June, September and December at an annual rate of $1.4375 per Series 11 Share for the initial period from and including the Closing Date (as defined herein) to, but excluding, June 30, 2024 (the “Initial Fixed Rate Period”). The initial dividend, if declared, will be payable on June 28, 2019 and will be $0.1772 per Series 11 Share, based on the anticipated closing of the Offering on May 16, 2019.

For each five‐year period after the Initial Fixed Rate Period (each, a “Subsequent Fixed Rate Period”), the holders of the Series 11 Shares will be entitled to receive fixed cumulative preferential cash dividends, if, as and when declared by the Board of Directors, payable quarterly on the last business day of each of March, June, September and December at the Annual Fixed Dividend Rate (as defined herein). The Company will determine on the 30th day prior to the first day of a Subsequent Fixed Rate Period, the annual fixed dividend rate applicable to that Subsequent Fixed Rate Period (the “Annual Fixed Dividend Rate”). Written notice of the Annual Fixed Dividend Rate for the upcoming Subsequent Fixed Rate Period will be provided by the Company to the registered holders on the 30th day prior to the first day of a Subsequent Fixed Rate Period. The Annual Fixed Dividend Rate will be equal to the sum of the Government of Canada Bond Yield (as defined herein) on the 30th day prior to the first day of a Subsequent Fixed Rate Period plus 4.15%, provided that, in any event, such rate shall not be less than 5.75%. See “Details of the Offering” in the Prospectus Supplement.

Option to Convert into Cumulative Floating Rate Preference Shares, Series 12

Holders of the Series 11 Shares will have the right, at their option, to convert their Series 11 Shares into Cumulative Floating Rate Preference Shares, Series 12 (the “Series 12 Shares”) on the basis of one Series 12 Share for each Series 11 Share, subject to certain conditions, on June 30, 2024 and on June 30 every five years thereafter. Series 11 Shares will be entitled to floating rate cumulative preferential cash dividends, if, as and when declared by the Board of Directors, payable quarterly on the last business day of each of March, June, September and December in an amount per Series 11 Share determined by multiplying the applicable Floating Quarterly Dividend Rate (as defined herein) by $25.00. The Floating Quarterly Dividend Rate for any Quarterly Floating Rate Period (as defined herein) will be equal to the sum of the T‐Bill Rate (as defined herein) plus 4.15% per annum (calculated on the basis of the actual number of days in the applicable Quarterly Floating Rate Period divided by 365 or 366, depending upon the actual number of days in the applicable year) determined on the Floating Rate Calculation Date (as defined herein). See “Details of the Offering” in the Prospectus Supplement

The Series 11 Shares and Series 12 Shares are series of shares in the same class. The conversion right entitles holders to elect periodically which of the two series they wish to hold and does not entitle holders to receive a different class or type of securities. Other than the different dividend rights and redemption rights attached thereto, the Series 11 Shares and Series 12 Shares are identical in all material respects.

Eligible Dividend Designation

Dividends are 100 per cent eligible dividends as defined by the Income Tax Act. Under this legislation, individual residents in Canada may be entitled to enhanced dividend tax credits that reduce the income tax otherwise payable.