Chemtrade Logistics Income Fund Announces $110 Million Convertible Debenture Bought Deal
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TORONTO, May 20, 2014 /CNW/ - Chemtrade Logistics Income Fund ("Chemtrade" or the "Fund") (TSX: CHE.UN) announced today a public offering, on a "bought deal" basis, of $110 million principal amount of convertible unsecured subordinated debentures, at a price of $1,000 per debenture, with an interest rate of 5.25% per annum, payable semi-annually on the last day of June and December commencing on December 31, 2014 (the "Debentures"). The Debentures will mature on June 30, 2021.
The offering is being made through a syndicate of underwriters led by BMO Capital Markets and Scotiabank.
The Fund has also granted the underwriters the option to purchase up to $16.5 million principal amount of additional Debentures at a price of $1,000 per Debenture to cover over-allotments, exercisable in whole or in part any time up to 30 days following closing of the offering.
The Debentures will be convertible at the holder's option into fully paid and non-assessable freely tradeable units of the Fund at the option of the holder at a conversion price of $28.00 per unit. The Debentures will not be redeemable before June 30, 2017. On or after June 30, 2017 and prior to June 30, 2019, the Debentures may be redeemed in whole or in part from time to time at the option of the Fund at par plus accrued and unpaid interest, provided that the weighted average trading price of the units on the Toronto Stock Exchange for the 20 consecutive trading days ending five trading days preceding the date on which notice of redemption is given is not less than 125% of the Conversion Price. On or after June 30, 2019, the Debentures may be redeemed at the option of the Fund at any time at par plus accrued and unpaid interest.
The net proceeds of the offering will be used to repay existing indebtedness and for general trust purposes.
The offering is subject to normal regulatory approvals, including approval of the Toronto Stock Exchange, and is expected to close on or about June 10, 2014.
The Debentures will be offered by way of a short form prospectus in all of the provinces and territories of Canada and may also be offered to qualified institutional buyers pursuant to Rule 144A in the United States.
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, inorganic coagulants for water treatment, liquid sulphur dioxide, sodium nitrite and sodium hydrosulphite. Chemtrade is a leading processor of spent acid as well as a leading regional supplier of sulphur, sodium chlorate, phosphorus pentasulphide, 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 ability to close the Offering and its timing and the use to be made of its proceeds. Forward-looking statements in this news release describe the expectations of the Fund and its subsidiaries as of the date hereof. These statements 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: there being no significant disruptions affecting the operations of the Fund and its subsidiaries; the timely receipt of required regulatory approvals; and global economic performance.
The Fund disclaims any intention or obligation to update any forward-looking information even if new information becomes available, as a result of future events or for any other reason, except as required by law. 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 Chemtrade Logistics Income Fund with the securities regulatory authorities, available at www.sedar.com.
SOURCE: Chemtrade Logistics Income Fund
Mark Davis
President & CEO
Tel: (416) 496-4176
Rohit Bhardwaj
Vice President, Finance & CFO
Tel: (416) 496-4177
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