CALGARY, ALBERTA–(Marketwired – April 1, 2016) – News Release – TransCanada Corporation (TSX:TRP) (NYSE:TRP) (TransCanada or the Corporation) today announced that it has completed its previously announced bought deal offering (the Offering) of subscription receipts (the Subscription Receipts).
On March 17, 2016, the Corporation entered into an agreement with a syndicate of underwriters (the Underwriters), led by RBC Capital Markets and TD Securities Inc., under which they agreed to purchase from TransCanada and sell to the public 92,000,000 Subscription Receipts at a price of $45.75 per Subscription Receipt. Effective at the closing, the Underwriters exercised in full their over-allotment option to acquire an additional 4,600,000 Subscription Receipts, such that a total of 96,600,000 Subscription Receipts were issued for total gross proceeds of $4,419,450,000.
Proceeds from the Offering will be used to finance a portion of the purchase price of the previously announced acquisition (the Acquisition) of Columbia Pipeline Group, Inc. (NYSE: CPGX) (Columbia) by subsidiaries of the Corporation’s wholly-owned subsidiary, TransCanada PipeLines Limited (TCPL). Columbia is a Houston, Texas-based company that operates an approximately 24,000-kilometre (15,000-mile) network of interstate natural gas pipelines extending from New York to the Gulf of Mexico, with a significant presence in the Appalachia production basin.
Each Subscription Receipt will entitle the holder thereof to receive automatically upon closing of the Acquisition, without any further action on the part of the holder thereof and without payment of additional consideration, one common share (Common Share) of the Corporation.
In addition, while the Subscription Receipts remain outstanding, holders will be entitled to receive cash payments (Dividend Equivalent Payments) per Subscription Receipt that are equal to, and will be paid on the same date as, dividends declared by TransCanada on each Common Share. Such Dividend Equivalent Payments will have the same record date as the related Common Share dividend and will be paid to holders of Subscription Receipts concurrently with the payment date of each such dividend, provided that holders of Subscription Receipts of record at the close of business on April 15, 2016 will be entitled to receive a Dividend Equivalent Payment in respect of the C$0.565 per Common Share dividend payable by TransCanada on April 29, 2016 to holders of Common Shares of record at the close of business on March 31, 2016, notwithstanding that the Subscription Receipt holders were not holders of record on the record date for such Common Share dividend. Dividend Equivalent Payments will be paid first out of any interest on the Escrowed Funds (defined below) and then out of the Escrowed Funds.
The gross proceeds from the sale of the Subscription Receipts (the Escrowed Funds) will initially be held in escrow by Computershare Trust Company of Canada, as escrow agent (the Escrow Agent), and invested in interest-bearing deposits with banks and other financial institutions with issuer credit ratings from Standard & Poors of at least A and Moody’s of at least A2, provided that Dividend Equivalent Payments may be made from the Escrowed Funds and the interest credited or received thereon from time to time, as described above.
The Subscription Receipts will commence trading on the Toronto Stock Exchange on April 1, 2016, under the symbol “TRP.R”.
The offering of Subscription Receipts was completed by way of a prospectus that was filed with provincial and territorial securities regulatory authorities in Canada and pursuant to a registration statement filed with the Securities & Exchange Commission in the United States under the multijurisdictional disclosure system.