Capital Power announces $125M bought deal




News Release

Capital Power announces $125 million offering of 5.75% Cumulative Minimum Rate Reset Preferred Shares

NOT FOR DISTRIBUTION INTO THE UNITED STATES OR TO UNITED STATES WIRE SERVICES

EDMONTON, Alberta – July 27, 2017 – Capital Power Corporation (“Capital Power”) (TSX:CPX) announced today that it will issue 5,000,000 Cumulative Minimum Rate Reset Preference Shares, Series 9 (the “Series 9 Shares”) at a price of $25.00 per Series 9 Share (the “Offering”) for aggregate gross proceeds of $125 million on a bought deal basis with a syndicate of underwriters, co-led by TD Securities Inc. and National Bank Financial Inc. In addition, Capital Power has granted the underwriters an option, exercisable in whole or in part anytime up to two business days prior to closing, to purchase up to an additional 1,000,000 Series 9 Shares on the same terms, for additional gross proceeds of up to $25 million.

The Series 9 Shares will pay fixed cumulative dividends of $1.4375 per share per annum, yielding 5.75% per annum, payable on the last business day of March, June, September and December of each year, as and when declared by the board of directors of Capital Power, for the initial period ending September 30, 2022. Assuming an issue date of August 9, 2017, the first quarterly dividend of $0.2048 per share is expected to be paid on September 29, 2017. The dividend rate will be reset on September 30, 2022 and every five years thereafter at a rate equal to the sum of the then five-year Government of Canada bond yield and 4.12%, provided that, in any event, such rate shall not be less than 5.75%. The Series 9 Shares are redeemable by Capital Power, at its option, on September 30, 2022 and on September 30 of every fifth year thereafter.

Holders of Series 9 Shares will have the right to convert all or any part of their shares into Cumulative Floating Rate Preference Shares, Series 10 (the “Series 10 Shares”), subject to certain conditions, on September 30, 2022 and every five years thereafter. Holders of Series 10 Shares will be entitled to receive a cumulative quarterly floating dividend at a rate equal to the sum of the then 90-day Government of Canada Treasury Bill yield plus 4.12%, as and when declared by the Board of Directors of Capital Power.

Net proceeds of the offering will be used to reduce indebtedness under Capital Power’s credit facilities.

Standard & Poor’s Ratings Services, a business unit of S&P Global Canada Corp., has assigned a provisional rating of P-3 for the Series 9 Shares and DBRS Limited has assigned a preliminary rating of Pfd-3 (low) for the Series 9 Shares.

The Series 9 Shares will be issued pursuant to a prospectus supplement to Capital Power’s short form base shelf prospectus dated May 3, 2016. The prospectus supplement will be filed with securities regulatory authorities in all provinces and territories in Canada. The Offering is subject to receipt of all necessary regulatory and stock exchange approvals.

Neither the Series 9 Shares nor the Series 10 Shares have been registered under the U.S. Securities Act of 1933, as amended, and neither may be offered or sold in the United States or to, or for the account or benefit of, U.S. persons absent registration or an applicable exemption from registration requirements. This news release does not constitute an offer to sell or the solicitation of an offer to buy any security, and shall not constitute an offer, solicitation or sale of the securities in any state in which such offer, solicitation or sale would be unlawful.

About Capital Power
Capital Power (TSX: CPX) is a growth-oriented North American power producer headquartered in Edmonton, Alberta. The company develops, acquires, operates and optimizes power generation from a variety of energy sources. Capital Power owns approximately 4,500 megawatts of power generation capacity at 24 facilities and is pursuing contracted generation capacity throughout North America.

For more information, please contact:
Media Relations:
Michael Sheehan
(780) 392-5222
msheehan@capitalpower.com
Investor Relations:
Randy Mah
(780) 392-5305 or (866) 896-4636 (toll-free)
investor@capitalpower.com