DBRS Assigns Rating of Pfd-3 to TransAlta’s Preferred Share Issue

DBRS has today assigned a rating of Pfd-3 with a Stable trend to the preferred shares offering of TransAlta Corporation (TransAlta). The $275 million cumulative redeemable rate-reset first preferred shares, Series C (the Series C Preferred Shares) will yield 4.60% per annum for the initial five-year period. The dividend rate will change on June 30, 2017, and every five years thereafter at a rate equal to the sum of the then-five-year government of Canada bond yield plus 3.10%. The Series C Preferred Shares are redeemable by TransAlta on June 30, 2017, and on June 30 every five years thereafter.

The Series C Preferred Shares are being issued pursuant to the prospectus supplement dated November 23, 2011, to the short-form base shelf prospectus dated November 15, 2011, and are expected to settle on or about November 30, 2011. The Series C Preferred Shares will rank on parity with any future series of first preferred shares of TransAlta, and net proceeds from the offering will be used to partially fund capital projects, for general corporate purposes and to reduce short-term indebtedness.

DBRS currently rates TransAlta’s Unsecured Debt/Medium-Term Notes at BBB with a Stable trend.

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

The applicable methodologies are Rating Companies in the North American Energy Utilities (Electric and Natural Gas) Industry and DBRS Preferred Share and Hybrid Criteria for Corporate Issuers, which can be found on our website under Methodologies.