Financing Plan and Concurrent Bought Deal Common Equity Financing
AQN has obtained a $2.725 billion syndicated acquisition financing commitment from CIBC and Scotiabank to support the Transaction. The acquisition financing commitment is subject to customary terms and conditions, including certain commitment reductions upon closing of permanent financing.
Today, the Company entered into an agreement with a syndicate of underwriters led by CIBC Capital Markets and Scotiabank (collectively, the “Underwriters”), pursuant to which the Underwriters have agreed to purchase, on a bought deal basis, an aggregate of 44,080,000 common shares of the Company (the “Shares”) at an offering price of C$18.15 per Share (the “Offering Price”) for total gross proceeds to the Company of C$800 million ($646 million) (the “Offering”). In connection with the Offering, the Company has granted the Underwriters an over-allotment option, exercisable in whole or in part, at any time for a period of 30 days following the closing of the Offering, to purchase up to an additional 6,612,000 Shares at the Offering Price (the “Over-Allotment Option”). If the Over-Allotment Option is exercised in full, the gross proceeds of the Offering will be C$920 million ($743 million).
The net proceeds of the Offering are expected to be used to (a) partially finance the Transaction purchase price, and (b) in the short-term, prior to the closing of the Transaction, reduce amounts outstanding under existing credit facilities of the Company and its subsidiaries. Following closing of the Offering, the Company does not expect to raise additional capital by way of the issuance of common equity through mid-2022, being the expected timing for closing of the Transaction. The remainder of the Transaction cash purchase price of approximately $979 million (approximately $882 million if the Over-Allotment Option is exercised in full) is expected to be satisfied through a variety of funding sources, which may include a combination of hybrid debt, equity units, and/or the monetization of non-regulated assets or investments. The timing of the remaining financing activities will be influenced by the regulatory approval process for the Transaction and are subject to prevailing market conditions. The Company’s financing plan is designed to maintain its investment grade credit ratings.