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Press release from Marketwire

Capstone Infrastructure Corporation Announces $75 Million Preferred Share Bought Deal Offering

Monday, June 13, 2011

Capstone Infrastructure Corporation Announces $75 Million Preferred Share Bought Deal Offering10:09 EDT Monday, June 13, 2011TORONTO, ONTARIO--(Marketwire - June 13, 2011) -NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATESCapstone Infrastructure Corporation (TSX:CSE)(TSX:CSE.DB.A) ("Capstone" or the "Corporation") today announced that it has agreed to issue, on a bought deal basis, 3,000,000 Cumulative 5-Year Rate Reset Preferred Shares, Series A (the "Series A Shares") at a price of $25.00 per Series A Share, for aggregate gross proceeds of $75,000,000, to a syndicate of underwriters co-led by TD Securities Inc., Macquarie Capital Markets Canada Ltd. and RBC Capital Markets for distribution to the public. Capstone has granted the underwriters an option to purchase up to an additional 450,000 Series A Shares at $25.00 per Series A Share to cover over-allotments, exercisable in whole or in part at any time until 30 days after closing, which, if exercised in full, would increase the gross offering size to $86,250,000.Holders of the Series A Shares will be entitled to receive a cumulative quarterly fixed dividend yielding 5.0% annually for the initial period ending July 31, 2016. Thereafter, the dividend rate will be reset every five years at a rate equal to the then current 5-year Government of Canada bond yield plus 2.71%.Holders of Series A Shares will have the right, at their option, to convert their shares into Cumulative Floating Rate First Preferred Shares, Series B (the "Series B Shares"), subject to certain conditions and the Corporation's right to redeem the Series A Shares as described below, on July 31, 2016 and on July 31 every five years thereafter. Holders of the Series B Shares will be entitled to receive cumulative quarterly dividends at a rate set quarterly equal to the then current three-month Government of Canada Treasury Bill yield plus 2.71%.Holders of Series B Shares may convert their Series B Shares into Series A Shares, subject to certain conditions and the Corporation's right to redeem the Series B Shares as described below, on July 31, 2021 and on July 31 every five years thereafter.The Series A Shares will not be redeemable prior to July 31, 2016. On July 31, 2016 and on July 31 every five years thereafter, the Corporation may, subject to certain conditions, redeem all or any part of the Series A Shares at a cash redemption price per share of $25.00 together with all declared and unpaid dividends. The Corporation may redeem all or any part of the Series B Shares at a cash redemption price per share of $25.00 together with all declared and unpaid dividends in the case of redemptions on July 31, 2021 and on July 31 every five years thereafter or $25.50 together with all declared and unpaid dividends in the case of redemptions on any other date after July 31, 2016. Standard & Poor's, a division of the McGraw Hill Companies, Inc. ("S&P"), has assigned a preliminary rating of P-3 for the Series A Shares.The net proceeds of the offering will be used to fund the Corporation's final equity commitment to the Amherstburg solar power facility, to fund future potential acquisitions and for general corporate purposes. The Series A Shares will be offered in all provinces and territories of Canada by way of a short-form prospectus. The offering is expected to close on or about June 30, 2011 and is subject to the receipt of all necessary regulatory approvals.This press release is not an offer of securities for sale in the United States. The securities being offered have not been and will not be registered under the United States Securities Act of 1933 and accordingly will not be offered, sold or delivered, directly or indirectly within the United States, its possessions and other areas subject to its jurisdiction or to, or for the account or for the benefit of a U.S. person, except in limited circumstances.About Capstone Infrastructure Corporation Capstone Infrastructure Corporation's mission is to build and responsibly manage a high quality portfolio of infrastructure businesses in Canada and internationally in order to deliver a superior total return to shareholders through a combination of stable dividends and capital appreciation. The Corporation's portfolio currently includes investments in gas cogeneration, wind, hydro and biomass power generating facilities, representing approximately 350 MW of installed capacity, and a 33.3% interest in a district heating business in Sweden. The Corporation is also currently developing a 20 MW solar power facility in Ontario. Please visit the Corporation's website at www.capstoneinfrastructure.com for more information.Notice to ReadersCertain of the statements contained in this news release are forward-looking and reflect management's expectations regarding the Corporation's future growth, results of operations, performance and business based on information currently available to the Corporation. Forward-looking statements are provided for the purpose of presenting information about management's current expectations and plans relating to the future and readers are cautioned that such statements may not be appropriate for other purposes. These statements use forward-looking words, such as "anticipate", "continue", "could", "expect", "may", "will", "estimate", "believe" or other similar words. These statements are subject to significant known and unknown risks and uncertainties that may cause actual results or events to differ materially from those expressed or implied by such statements and, accordingly, should not be read as guarantees of future performance or results. The forward-looking statements in this news release are based on information currently available and what the Corporation currently believes are reasonable assumptions, including the material assumptions for each of the Corporation's assets set out in its fiscal 2010 Annual Report under the heading "Asset Performance" as updated in subsequently filed Quarterly Financial Reports of the Corporation and other filings made by the Corporation with the Canadian securities regulatory authorities (such documents are available on the Canadian Securities Administrators' System for Electronic Document Analysis and Retrieval ("SEDAR") at www.sedar.com). Other material factors or assumptions that were applied in formulating the forward-looking statements contained herein include the assumption that the business and economic conditions affecting the Corporation's operations will continue substantially in their current state, including, with respect to industry conditions, general levels of economic activity, regulations, weather, taxes and interest rates, that there will be no unplanned material changes to the Corporation's facilities, equipment or contractual arrangements.Although the Corporation believes that it has a reasonable basis for the expectations reflected in these forward-looking statements, actual results may differ from those suggested by the forward-looking statements for various reasons, including risks related to: power infrastructure (operational performance; power purchase agreements; fuel costs and supply; contract performance; development risk; technology risk; default under credit agreements; land tenure and related rights; regulatory regime and permits; and force majeure) and the Corporation (variability and payment of dividends, which are not guaranteed; geographic concentration and non-diversification; reliance on key personnel; insurance; environmental, health and safety regime; availability of financing; shareholder dilution; the volatile market price for common shares of the Corporation; changes in legislation and administrative policy; and International Financial Reporting Standards). There are also a number of risks related to the Corporation's investment in the district heating business in Sweden, including: fuel costs and availability; industrial and residential contracts; geographic concentration; regulatory environment; environmental matters; environmental, health and safety; competition and revenue growth; liability and insurance; reliance on key personnel; labour relations and costs; assumption of liabilities; minority interest; and foreign exchange. There is also a risk that Värmevärden may not achieve expected results. For a more comprehensive description of these and other possible risks, please see the Corporation's Annual Information Form dated March 24, 2011 for the year ended December 31, 2010 as updated in subsequently filed Quarterly Financial Reports and other filings made by the Corporation with the Canadian securities regulatory authorities. These filings are available on SEDAR. The assumptions, risks and uncertainties described above are not exhaustive and other events and risk factors could cause actual results to differ materially from the results and events discussed in the forward-looking statements. These forward-looking statements reflect current expectations of the Corporation as at the date of this news release and speak only as at the date of this news release. Except as may be required by applicable law, the Corporation does not undertake any obligation to publicly update or revise any forward-looking statements. FOR FURTHER INFORMATION PLEASE CONTACT: Sarah Borg-OlivierCapstone Infrastructure CorporationVice President, Communications(416) 607 5009sborg-olivier@capstoneinfrastructure.comwww.capstoneinfrastructure.com