Pembina Pipeline Corporation ("Pembina" or the "Company") (TSX:
PPL; NYSE: PBA) announced today that it does not intend to exercise
its right to redeem the currently outstanding Cumulative Redeemable
Rate Reset Class A Preferred Shares, Series 17 ("Series 17 Shares")
(TSX: PPL.PR.Q) on March 31, 2024.
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As a result of the decision not to redeem the Series 17 Shares,
and subject to certain terms of the Series 17 Shares, the holders
of the Series 17 Shares will have the right to elect to convert all
or part of their Series 17 Shares on a one-for-one basis into
Cumulative Redeemable Floating Rate Class A Preferred Shares,
Series 18 of Pembina ("Series 18 Shares") on March 31, 2024 (the
"Conversion Date"). Holders who do not exercise their right to
convert their Series 17 Shares into Series 18 Shares will retain
their Series 17 Shares.
As provided in the terms of the Series 17 Shares: (i) if Pembina
determines that there would remain outstanding immediately
following the conversion less than 1,000,000 Series 17 Shares, then
all remaining Series 17 Shares will be automatically converted into
Series 18 Shares on a one-for-one basis effective as of the
Conversion Date; or (ii) if Pembina determines that there would be
less than 1,000,000 Series 18 Shares outstanding immediately
following the conversion, no Series 17 Shares will be converted
into Series 18 Shares on the Conversion Date. There are currently
6,000,000 Series 17 Shares outstanding.
With respect to any Series 17 Shares that remain outstanding
after the Conversion Date, 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 17 Shares for the five-year
period from and including March 31, 2024, to, but excluding, March
31, 2029, will be 6.605 percent, being equal to the five-year
Government of Canada bond yield of 3.595 percent determined as of
today plus 3.01 percent, in accordance with the terms of the Series
17 Shares.
With respect to any Series 18 Shares that may be issued on the
Conversion Date, 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 the Series 18 Shares for the
three-month floating rate period from and including March 31, 2024,
to, but excluding, June 30, 2024, will be 7.991 percent, being
equal to the annual rate of interest for the most recent auction of
90-day Government of Canada treasury bills of 4.981 percent plus
3.01 percent, in accordance with the terms of the Series 18 Shares
(the "Floating Quarterly Dividend Rate"). The Floating Quarterly
Dividend Rate will be reset on the last day of March, June,
September and December in each year.
Beneficial holders of Series 17 Shares who wish to exercise
their right of conversion during the conversion period, which runs
from March 1, 2024, until 3:00 pm (MT) / 5:00 pm (ET) on March 18,
2024, 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 March 31, 2024,
to holders of the Series 17 Shares of record on March 15, 2024,
will be $0.301313 per Series 17 Share. Pursuant to the terms of the
Series 17 Shares, as March 31, 2024 is not a business day, payment
will occur on April 1, 2024. For more information on the terms of
the Series 17 Shares and the Series 18 Shares, please see the
articles of amalgamation dated October 2, 2017, which can be found
on SEDAR+ at www.sedarplus.ca.
About Pembina
Pembina Pipeline Corporation is a leading energy transportation
and midstream service provider that has served North America's
energy industry for 70 years. Pembina owns an integrated network of
hydrocarbon liquids and natural gas pipelines, gas gathering and
processing facilities, oil and natural gas liquids infrastructure
and logistics services, and an export terminals business. Through
our integrated value chain, we seek to provide safe and reliable
energy solutions that connect producers and consumers across the
world, support a more sustainable future and benefit our customers,
investors, employees and communities. For more information, please
visit www.pembina.com.
Purpose of Pembina: We deliver extraordinary energy solutions so
the world can thrive.
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.
Forward-Looking Information and Statements
This news release contains certain forward-looking information
and statements (collectively, "forward-looking statements"),
including forward-looking statements within the meaning of the
"safe harbor" provisions of applicable securities legislation, that
are based on Pembina's current expectations, estimates, projections
and assumptions in light of its experience and its perception of
historical trends. In some cases, forward-looking statements can be
identified by terminology such as "continue", "anticipate",
"schedule", "will", "expects", "estimate", "potential", "planned",
"future", "outlook", "strategy", "protect", "trend", "commit",
"maintain", "focus", "ongoing", "believe" and similar expressions
suggesting future events or future performance.
In particular, this news release contains forward-looking
statements relating to, without limitation, the conversion rights,
future dividend rates and payment terms for the Series 17 Shares
and the Series 18 Shares. The forward-looking statements are based
on certain assumptions that Pembina has made in respect thereof as
at the date of this news release regarding, among other things: the
success of Pembina's operations and growth projects; prevailing
commodity prices, margins, volumes and exchange rates; that
Pembina's future results of operations will be consistent with past
performance and management expectations in relation thereto; the
availability of capital to fund future capital requirements
relating to existing assets and projects; future operating costs;
that all required regulatory and environmental approvals can be
obtained on the necessary terms in a timely manner; prevailing
regulatory, tax and environmental laws and regulations; maintenance
of operating margins; and the availability of coverage under
Pembina’s insurance policies (including in respect of Pembina’s
business interruption insurance policy).
Although Pembina believes the expectations and material factors
and assumptions reflected in these forward-looking statements are
reasonable as of the date hereof, there can be no assurance that
these expectations, factors and assumptions will prove to be
correct. These forward-looking statements are not guarantees of
future performance and are subject to a number of known and unknown
risks and uncertainties including, but not limited to: the
regulatory environment and decisions; Indigenous and landowner
consultation requirements; the impact of competitive entities and
pricing; reliance on third parties to successfully operate and
maintain certain assets; the strength and operations of the oil and
natural gas production industry and related commodity prices;
non-performance or default by counterparties to agreements which
Pembina or one or more of its affiliates has entered into in
respect of its business; actions by governmental or regulatory
authorities; the ability of Pembina to acquire or develop the
necessary infrastructure in respect of future development projects;
fluctuations in operating results; adverse general economic and
market conditions in Canada, North America and worldwide; risks
relating to inflation; the ability to access various sources of
debt and equity capital; changes in credit ratings; counterparty
credit risk; and certain other risks and uncertainties detailed in
Pembina's management's discussion and analysis and annual
information form, each for the year ended December 31, 2023, and
from time to time in Pembina's public disclosure documents
available at www.sedarplus.ca, www.sec.gov and through Pembina's
website at www.pembina.com.
This list of risk factors should not be construed as exhaustive.
Readers are cautioned that events or circumstances could cause
actual results to differ materially from those predicted,
forecasted or projected. The forward-looking statements contained
in this news release speak only as of the date hereof. Pembina does
not undertake any obligation to publicly update or revise any
forward-looking statements or information contained herein, except
as required by applicable laws. The forward-looking statements
contained in this news release are expressly qualified by this
cautionary statement.
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For further information: Investor Relations (403) 231-3156
1-855-880-7404 e-mail: investor-relations@pembina.com
www.pembina.com
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