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SERVICES OR DISSEMINATION IN THE UNITED
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TORONTO, Aug. 26, 2020 /CNW/ - Chemtrade Logistics
Income Fund (TSX: CHE.UN) ("Chemtrade" or the "Fund")
announced today that it has completed its previously-announced
public offering (the "Offering") of $75 million principal amount of 8.50% convertible
unsecured subordinated debentures (the "Debentures") due
September 30, 2025. The Debentures
are convertible, at the option of the holder, into trust units of
Chemtrade at a conversion price of $7.35 per unit. The Debentures were sold to a
syndicate of underwriters led by BMO Capital Markets, CIBC Capital
Markets, National Bank Financial Inc., RBC Capital Markets,
Scotiabank, and TD Securities Inc. on a bought deal basis. In
addition, Chemtrade has granted the underwriters an over-allotment
option to purchase up to an additional $11.25 million aggregate principal amount of
Debentures at the same price, which can be exercised in whole or in
part at any time for a period of 30 days following the closing of
the Offering.
Chemtrade also announced today that it will redeem on
September 29, 2020 (the
"Redemption Date") $100.0
million principal amount of its 5.25% convertible unsecured
subordinated debentures due June 30,
2021 (the "2021 Debentures") in accordance with the
terms of the trust indenture, as amended and supplemented by
supplemental indentures thereto (collectively, the
"Indenture"), pursuant to which they were issued. On the
Redemption Date, holders of 2021 Debentures will receive
approximately $1,013.0532 for each
$1,000 principal amount of 2021
Debentures, being equal to $1,000,
plus all accrued and unpaid interest thereon to but excluding the
Redemption Date. The 2021 Debentures that are redeemed will cease
to bear interest from and after the Redemption Date.
The record date for determining the holders whose 2021
Debentures are to be redeemed shall be September 25, 2020. The
2021 Debentures shall be redeemed on a pro rata basis to the
nearest multiple of $1,000 in
accordance with the principal amount of the 2021 Debentures
registered in the name of each holder, or in such other manner as
deemed equitable, subject to any applicable regulatory
approvals.
Formal notice of redemption is being delivered to the holders of
the 2021 Debentures today in accordance with the terms of the
Indenture. The aggregate amount of 2021 Debentures outstanding as
of the date hereof is $126.5 million.
Following the partial redemption, $26.5
million aggregate principal amount of the 2021 Debentures
are expected to remain outstanding and shall continue to be subject
to the terms of the Indenture.
Chemtrade will use the net proceeds of the Offering, together
with borrowings of up to $30 million
from the Fund's existing credit agreement (the "Credit
Facility"), to fund the partial redemption of the 2021
Debentures and, pending any such use, the net proceeds will be used
to repay indebtedness under the Credit Facility.
The securities offered have not been registered under the U.S.
Securities Act of 1933, as amended, and may not be offered or sold
in the United States absent
registration or an applicable exemption from the registration
requirements. This press release shall not constitute an offer to
sell or the solicitation of an offer to buy securities in
the United States, nor shall there
be any offer, solicitation or sale of the securities in any
jurisdiction in which such offer, solicitation or sale would be
unlawful.
About Chemtrade
Chemtrade operates a diversified business providing industrial
chemicals and services to customers in North America and around the world. Chemtrade
is one of North America's largest
suppliers of sulphuric acid, spent acid processing services,
inorganic coagulants for water treatment, sodium chlorate, sodium
nitrite, sodium hydrosulphite, and phosphorus pentasulphide.
Chemtrade is a leading regional supplier of sulphur, chlor-alkali
products, liquid sulphur dioxide, potassium chloride, and zinc
oxide. Additionally, Chemtrade provides industrial services such as
processing by-products and waste streams.
Caution Regarding Forward-Looking Statements
Certain statements contained in this news release constitute
forward-looking information within the meaning of certain
securities laws, including the Securities Act (Ontario). Forward-looking information can be
generally identified by the use of words such as "anticipate",
"continue", "estimate", "expect", "expected", "intend", "may",
"will", "project", "plan", "should", "believe" and similar
expressions. Specifically, forward-looking information in this news
release include statements respecting certain future expectations
about the Fund's intended use of the proceeds, including the
partial redemption of 2021 Debentures and anticipated borrowings
from the Credit Facility to fund such redemption. Forward-looking
statements in this news release describe the expectations of the
Fund and its subsidiaries as of the date hereof.
These statements are based on assumptions and involve known and
unknown risks, uncertainties and other factors that may cause
actual results or events to differ materially from those
anticipated in such forward-looking statements for a variety of
reasons, including without limitation the risks and uncertainties
detailed under the "Risk Factors" section of the Fund's latest
Annual Information Form and the "Risks and Uncertainties" section
of the Fund's most recent Management's Discussion &
Analysis.
Although the Fund believes the expectations reflected in these
forward-looking statements and the assumptions upon which they are
based are reasonable, no assurance can be given that actual results
will be consistent with such forward-looking statements, and they
should not be unduly relied upon. With respect to the
forward-looking statements contained in this news release, the Fund
has made assumptions regarding: the timing and completion of the
partial redemption of the 2021 Debentures; there being no
significant disruptions affecting the operations of the Fund and
its subsidiaries, whether due to labour disruptions, supply
disruptions, power disruptions, transportation disruptions, damage
to equipment or otherwise; the timely receipt of required
regulatory approvals; and global economic performance.
Except as required by law, the Fund does not undertake to update
or revise any forward-looking statements, whether as a result of
new information, future events or for any other reason. The
forward-looking information contained herein are expressly
qualified in their entirety by this cautionary statement.
Further information can be found in the disclosure documents
filed by the Fund with the securities regulatory authorities,
available at www.sedar.com.
SOURCE Chemtrade Logistics Income Fund