DBRS Assigns Rating of Pfd-3 (high) to Veresen Inc.’s Series C Preferred Shares, Stable Trend

DBRS has assigned a rating of Pfd-3 (high) with a Stable trend to the $150 million Cumulative Redeemable Preferred Shares, Series C (the Offering; the Series C Preferred Shares) issued by Veresen Inc. (Veresen or the Company).

The holders of the Series C Preferred Shares will be entitled to receive fixed cumulative preferential cash dividends at an annual rate of $1.25 payable quarterly on the last day of March, June, September and December in each year. The first quarterly dividend payment date is scheduled for December 31, 2013. The dividend rate for each quarter during the five-year period thereafter will be determined using a rate equal to the sum of the Government of Canada yield for the respective period plus a spread of 3.01%.

The Series C Preferred Shares will not be redeemable prior to March 31, 2019. The Series C Preferred Shares are redeemable for cash by Veresen, at its option, on March 31, 2019, and on March 31 in every fifth year thereafter for cash in a payment of $25.00 per share, plus all accrued and unpaid dividends.

DBRS understands that the net proceeds of the Offering will be used by Veresen to reduce its indebtedness, to partially fund capital expenditures and for other general corporate purposes.

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

The applicable methodologies are Rating North American Pipeline and Diversified Energy Companies (May 2011) and DBRS Criteria: Preferred Share and Hybrid Criteria for Corporate Issuers (Excluding Financial Institutions) (November 2012), both of which can be found on our website under Methodologies.