Capital Power Closes Significant Private Offering of Notes
Capital Power Completes Major Notes Offering
Capital Power Corporation (TSX: CPX) has successfully concluded a private offering amounting to US$1.2 billion through the issuance of senior notes. This financial move showcases the company’s strategic approach to funding its growth initiatives and acquisitions.
Details of the Offering
The offering comprises US$700 million in senior notes due in 2028, featuring a 5.257% interest rate, and an additional US$500 million in notes that will mature in 2035 with a 6.189% interest rate. These notes are issued by Capital Power (US Holdings) Inc., a wholly-owned subsidiary of Capital Power. Significantly, these notes are guaranteed by Capital Power and its subsidiary companies.
Purpose of the Offering
The net proceeds from this offering are intended to cover a significant part of the acquisition cost for Hummel Station, LLC, which operates a 1,124 MW combined-cycle natural gas facility. Additionally, funds will help in acquiring Rolling Hills Generating, L.L.C., known for its 1,023 MW combustion turbine natural gas facility. These acquisitions reinforce Capital Power’s commitment to expanding its renewable and sustainable energy portfolio.
Redemption Terms
Investors should be aware that the 2035 Notes include a special mandatory redemption clause. If the company fails to complete the acquisition of the two facilities by specified deadlines, the notes will be subject to mandatory redemption. Capital Power has outlined that unutilized funds from the offering will either facilitate this redemption or support capital development, pay down existing debt, or fund other corporate purposes.
Legal Considerations
The offering did not undergo registration under the U.S. Securities Act or any U.S. state securities laws, meaning it was only available to qualified institutional buyers under Rule 144A and non-U.S. persons outside the United States. This decision aligns with a cautious approach to capital raising and compliance in cross-border transactions.
Forward-Looking Statements Clarified
The recent announcement contains forward-looking statements intended to assist shareholders and potential investors in understanding the company’s expectations. These statements highlight that actual results may vary due to several risks associated with the acquisitions and general operational activities.
Factors Influencing Future Performance
The success of completing the acquisitions depends on a variety of factors, including necessary regulatory approvals. Capital Power remains focused on managing these variables effectively to align with its strategic goals and future performance metrics.
Company’s Acknowledgement of Indigenous Lands
In respecting the land and communities that support its operations, Capital Power acknowledges its presence within the ancestral and traditional territories of Indigenous Peoples across the region. This acknowledgment signifies the company's ethical commitment to reconciliation and community engagement.
About Capital Power
As a leading power producer, Capital Power operates approximately 10 GW of power generation across 30 facilities in North America. The company emphasizes the importance of providing safe, reliable, and affordable electricity while striving for a lower-carbon energy future. Their motto, “Powering Change by Changing Power™,” encapsulates the innovative spirit driving their operations.
Contact Information
Media Relations: Katherine Perron | (780) 392-5335 | kperron@capitalpower.com
Investor Relations: Roy Arthur | (403) 736-3315 | investor@capitalpower.com
Frequently Asked Questions
What is the total amount raised in the notes offering?
The total amount raised in the notes offering is US$1.2 billion.
What will the proceeds from the offering be used for?
The proceeds will fund the acquisition of two natural gas facilities and support future growth initiatives.
Are the notes registered with U.S. securities authorities?
No, the offer and sale of the notes are not registered under U.S. securities laws.
What are the risks associated with the offering?
The completion of acquisitions and the redemption terms present potential risks affecting the company's financial strategies.
How does Capital Power impact its community?
Capital Power acknowledges its Indigenous land heritage and focuses on providing reliable energy while supporting community engagement and reconciliation efforts.
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