As a result, subject to certain terms of the Series 9 Shares, the holders of the Series 9 Shares will have the right to convert all or part of their Series 9 Shares on a one-for-one basis into Cumulative Redeemable Floating Rate Class A Preferred Shares, Series 10 of Pembina (“Series 10 Shares”) on the Conversion Date. Holders who do not exercise their right to convert their Series 9 Shares into Series 10 Shares will retain their Series 9 Shares.
As provided in the terms of the Series 9 Shares: (i) if Pembina determines that there would remain outstanding immediately following the conversion less than 1,000,000 Series 9 Shares, then all remaining Series 9 Shares will be automatically converted into Series 10 Shares on a one-for-one basis effective December 1, 2020; or (ii) if Pembina determines that there would be less than 1,000,000 Series 10 Shares after December 1, 2020, no Series 9 Shares will be converted into Series 10 Shares on the Conversion Date. There are currently 9,000,000 Series 9 Shares outstanding.
With respect to any Series 9 Shares that remain outstanding after December 1, 2020, 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 9 Shares for the five-year period from and including December 1, 2020 to, but excluding, December 1, 2025 will be 4.302 percent, being equal to the five-year Government of Canada bond yield of 0.392 percent determined as of today plus 3.91 percent, in accordance with the terms of the Series 9 Shares.
With respect to any Series 10 Shares that may be issued on December 1, 2020, 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 Series 10 Shares for the three-month floating rate period from and including December 1, 2020 to, but excluding, March 1, 2021 will be 3.996 percent, being equal to the annual rate of interest for the most recent auction of 90-day Government of Canada treasury bills of 0.086 percent plus 3.91 percent, in accordance with the terms of the Series 10 Shares (the “Floating Quarterly Dividend Rate”). The Floating Quarterly Dividend Rate will be reset every quarter.
Beneficial holders of Series 9 Shares who wish to exercise their right of conversion during the conversion period, which runs from November 2, 2020 until 3:00 (MT) / 5:00 pm (ET) on November 16, 2020, 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 December 1, 2020 to holders of the Series 9 Shares of record on November 2, 2020 will be $0.296875 per Series 9 Share, consistent with the dividend rate in effect since issuance of the Series 9 Shares. For more information on the terms of the Series 9 Shares and the Series 10 Shares, please see the prospectus supplement dated April 2, 2015 which can be found on SEDAR, under the profile of Pembina Pipeline Corporation, at www.sedar.com.
Calgary-based Pembina Pipeline Corporation is a leading transportation and midstream service provider that has been serving North America’s energy industry for more than 65 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; an oil and natural gas liquids infrastructure and logistics business; is growing an export terminals business; and is currently developing a petrochemical facility to convert propane into polypropylene. 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 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.