DBRS Rates TransCanada Corporation’s Preferred Share Issue at Pfd-2 (low), Stable Trend

DBRS has today assigned a rating of Pfd-2 (low) with a Stable trend to TransCanada Corporation’s (TransCanada or the Company) $450 million cumulative redeemable first preferred shares, Series 9 (the Series 9 Preferred Shares), which have a dividend rate of 4.25% per annum, payable quarterly for the initial fixed-term period ending October 30, 2019. The dividend rate will reset on October 30, 2019, and on October 30 every five years thereafter at a rate equal to the sum of the then five-year Government of Canada bond yield plus 2.35%. The Series 9 Preferred Shares are redeemable by TransCanada on October 30, 2019, and on October 30 of every fifth year thereafter.

Holders of the Series 9 Preferred Shares will have the right, at their option, to convert their shares into cumulative redeemable first preferred shares, Series 10 (the Series 10 Preferred Shares), subject to certain conditions, on October 30, 2019, and on October 30 every five years thereafter. Holders of the Series 10 Preferred Shares will be entitled to receive cumulative quarterly dividends at a rate equal to the sum of the then 90-day Government of Canada Treasury bill rate plus 2.35%.

The Series 9 Preferred Shares are to be issued under a prospectus supplement dated January 13, 2014, to the short-form base shelf prospectus dated December 2, 2013, and are expected to close on January 20, 2014. The Series 9 Preferred Shares will rank equally with all outstanding cumulative redeemable first preferred shares issued by the Company. Net proceeds from the offering will be used for general corporate purposes and to reduce short-term indebtedness of TransCanada and its affiliates.

Notes:
All figures are in Canadian dollars unless otherwise noted.

The related regulatory disclosures pursuant to the National Instrument 25-101 Designated Rating Organizations are hereby incorporated by reference and can be found by clicking on the link to the right under Related Research or by contacting us at info@dbrs.com.

The applicable methodology is Rating Pipeline and Diversified Energy Companies (January 2014), which can be found on our website under Methodologies.