Finance & Investing | Capital Markets

Pembina Funds 2014 Capex with Latest Offering

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Closing Announcement - January 16 2014

All financial figures are in Canadian dollars, unless otherwise noted.

Pembina Pipeline Corporation has announced that it has closed its previously announced public offering of 10,000,000 cumulative redeemable rate reset class A preferred shares, series 5 for aggregate gross proceeds of $250 million.

The Offering was announced on January 7, 2014 when Pembina entered into an agreement with a syndicate of underwriters. Due to strong investor demand, the size of the Offering was increased from an originally proposed offering of 6,000,000 Series 5 Preferred Shares plus an underwriters' option to purchase up to an additional 2,000,000 Series 5 Preferred Shares (for aggregate gross proceeds of $200 million assuming the underwriters' option had been exercised in full).

Proceeds from the Offering will be used to partially fund Pembina's 2014 capital expenditure program, including capital expenditures relating to Pembina's current expansion and growth projects, to reduce indebtedness under the Company's credit facilities, and for general corporate purposes of the Company and its affiliates.

The Series 5 Preferred Shares will begin trading on the Toronto Stock Exchange today under the symbol PPL.PR.E.

Pembina's Board of Directors also declared an initial dividend of $0.1507 per Series 5 Preferred Share for the period from January 16, 2014 to February 28, 2014 which is payable on March 1, 2014 to shareholders of record at the close of business on February 1, 2014.

Future dividends on the Series 5 Preferred Shares are expected to be $0.3125 quarterly, or $1.25 per share on an annualized basis, payable on the 1st day of March, June, September and December, as and when declared by the Board of Directors of Pembina, for the initial fixed rate period to but excluding June 1, 2019.

All of Pembina's dividends are designated "eligible dividends" for Canadian income tax purposes.

Initial Announcement - January 7 2014

Pembina Pipeline Corporation has announced today that it has entered into an agreement with a syndicate of underwriters, led by Scotiabank and RBC Capital Markets, pursuant to which the underwriters have agreed to purchase from Pembina 6,000,000 cumulative redeemable rate reset class A preferred shares, Series 5 at a price of $25.00 per share for distribution to the public.

The holders of Series 5 Preferred Shares will be entitled to receive fixed cumulative dividends at an annual rate of $1.25 per share, payable quarterly on the 1st day of March, June, September and December, as and when declared by the Board of Directors of Pembina, yielding 5.00 per cent per annum, for the initial fixed rate period to but excluding June 1, 2019. The first quarterly dividend payment date is scheduled for March 1, 2014. The dividend rate will reset on June 1, 2019 and every five years thereafter at a rate equal to the sum of the then five-year Government of Canada bond yield plus 3.00 per cent. The Series 5 Preferred Shares are redeemable by Pembina, at its option, on June 1, 2019 and on June 1 of every fifth year thereafter at a price of $25.00 per share plus accrued and unpaid dividends.

The holders of Series 5 Preferred Shares will have the right to convert their shares into cumulative redeemable floating rate class A preferred shares, Series 6, subject to certain conditions, on June 1, 2019 and on June 1 of every fifth year thereafter. The holders of Series 6 Preferred Shares will be entitled to receive quarterly floating rate cumulative dividends, as and when declared by the Board of Directors of Pembina, at a rate equal to the sum of the then 90-day Government of Canada treasury bill rate plus 3.00 per cent.

Pembina has granted to the underwriters an option, exercisable at any time up to 48 hours prior to the closing of the offering, to purchase up to an additional 2,000,000 Series 5 Preferred Shares at a price of $25.00 per share.

Proceeds from the offering will be used to partially fund Pembina's 2014 capital expenditure program, including capital expenditures relating to Pembina's current expansion and growth projects, to reduce indebtedness under the Corporation's credit facilities and for general corporate purposes of the Corporation and its affiliates.

Closing of the offering is expected on January 16, 2014, subject to customary closing conditions.

The offering is being made by means of a prospectus supplement under the short form base shelf prospectus filed by the Corporation on February 22, 2013 in each of the provinces of Canada.

This news release does not constitute an offer to sell or a solicitation of an offer to buy the preferred shares in any jurisdiction. The preferred shares to be offered have not been and will not be registered under the United States Securities Act of 1933, as amended, or under any state securities laws, and may not be offered or sold within the United States.