Macquarie Power & Infrastructure Income Fund
TSX : MPT.UN

Macquarie Power & Infrastructure Income Fund

December 01, 2009 08:03 ET

Macquarie Power & Infrastructure Income Fund Announces $50 Million Offering of Convertible Debentures

TORONTO, ONTARIO--(Marketwire - Dec. 1, 2009) -

NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES. ANY FAILURE TO COMPLY WITH THIS RESTRICTION MAY CONSTITUTE A VIOLATION OF U.S. SECURITIES LAW.

Macquarie Power & Infrastructure Income Fund (TSX:MPT.UN)("MPT", or the "Fund") announced today that it has entered into an agreement to sell to a syndicate of underwriters, led by TD Securities Inc. and BMO Capital Markets, and including RBC Capital Markets, Macquarie Capital Markets Canada Ltd.(1), CIBC, Brookfield Financial Corporation, HSBC Securities (Canada) Inc., Cormark Securities Inc. and Genuity Capital Markets (the "Underwriters"), $50 million principal amount of 6.50% convertible unsecured subordinated debentures due December 31, 2016 (the "2016 Debentures").

The Fund has also granted the Underwriters an option (the "Over-allotment Option), exercisable in whole or in part at any time up until 30 days after the closing date, to purchase an additional $7.5 million principal amount of 2016 Debentures, at the same price. If the Over-allotment Option is exercised in full, the total gross proceeds of the financing will be $57.5 million.

The 2016 Debentures will bear interest at a rate of 6.50% per annum payable semi-annually in arrears on June 30 and December 31 in each year commencing on June 30, 2010, and will mature on December 31, 2016.

Holders may convert the 2016 Debentures into MPT units at a conversion price of $7.00 per unit (the "Conversion Price") at any time prior to the earlier of December 31, 2016 and the date fixed by the Fund for redemption.

The 2016 Debentures cannot be redeemed by MPT before December 31, 2012. On or after December 31, 2012 and prior to December 31, 2014, MPT has the option to redeem the 2016 Debentures in whole or in part, from time to time, at a price equal to their principal amount plus accrued interest, provided that the volume weighted average trading price for the units is not less than 125% of the Conversion Price. On or after December 31, 2014, MPT may redeem the 2016 Debentures in whole or in part, from time to time, at a price equal to their principal amount plus accrued interest. Subject to regulatory approval, MPT may satisfy its obligation to repay the principal amount of the 2016 Debentures on redemption or at maturity, in whole or in part, by delivering that number of units of MPT equal to the principal amount of 2016 Debentures due divided by 95% of the market price for the units at that time, plus accrued interest in cash.

The offering will be made in all provinces of Canada and is expected to close on or about December 22, 2009, subject to regulatory approval.

The Fund also announced that it will be redeeming all of its outstanding 6.75% convertible unsecured subordinated debentures due December 31, 2010, totalling $38.9 million (the "2010 Debentures"). The date fixed for redemption of the 2010 Debentures is January 11, 2010 (the "Redemption Date"). The 2010 Debentures will be redeemed by the Fund at a price equal to the principal amount thereof plus accrued and unpaid interest to the Redemption Date.

Proceeds from the offering of the 2016 Debentures will be used to redeem the Fund's outstanding 2010 Debentures and for general purposes of the Fund.

The units and 2016 Debentures have not been and will not be registered under the United States Securities Act of 1933 and may not be offered or sold in the United States absent registration or applicable exemption from the registration requirement of such Act. This news release is not an offer of securities for sale in the United States.

About the Fund

Macquarie Power & Infrastructure Income Fund invests in essential infrastructure assets in North America with an emphasis on power infrastructure. MPT's strategy is to acquire and actively manage a diverse, high quality portfolio of infrastructure assets to improve their financial performance and provide growing and sustainable distributions to unitholders. MPT's portfolio includes investments in gas cogeneration, wind, hydro and biomass power generating facilities, representing approximately 350 MW of installed capacity, and a 45% interest in Leisureworld Senior Care LP, a leading provider of long-term care, or social infrastructure, in Ontario. MPT is managed by a wholly-owned subsidiary of Macquarie Group Limited. Please visit www.macquarie.com/mpt for additional information.

Forward-looking Statements

Certain statements in this news release may constitute "forward-looking" statements, which involve known and unknown risks, uncertainties and other factors that may cause the actual results to be materially different from any future results expressed or implied by such forward-looking statements. When used in the this news release, such statements use such words as "may", "will", "expect", "believe", "plan" and other similar terminology. Forward-looking statements involve significant risks and uncertainties, should not be read as guarantees of future performance or results and will not necessarily be accurate indications of whether or not such results will be achieved. The forward-looking statements contained in this news release are based on information currently available and what the Fund currently believes are reasonable assumptions, including the material assumptions for each of the Fund's assets set out in the Fund's 2008 Annual Report under the headings "Outlook" on pages 23 to 24, as updated in subsequently filed quarterly Financial Reports of the Fund. However, the Fund cannot assure investors that actual results will be consistent with these forward-looking statements. These forward-looking statements are made as of the date of this news release, and, except as required by law, the Fund does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise. The Fund cautions readers not to place undue reliance on any forward-looking statements contained in this news release. The forward-looking statements contained in this news release are expressly qualified by this cautionary statement.

The forward-looking information contained in this news release is presented for the purposes of assisting investors and analysts in understanding the Fund's financial position and our stated priorities and objectives may not be appropriate for other purposes. The Fund cautions readers not to place undue reliance on any forward-looking statements, which speak only as of the date made. A number of factors could cause actual results to differ materially from the results discussed in the forward-looking statements, including, but not limited to, risks associated with: the operational performance of the Fund's assets; power purchase agreements; fuel costs, supply and transportation; default under credit agreements; regulatory regime and permits; land tenure and related rights; government regulation and funding; the ability to complete future acquisitions; LTC home ownership and operation; minority ownership interest in Leisureworld; reliance on key personnel; default under Leisureworld's long-term debt and credit facility; labour relations and cost; the variability of distributions; unitholder liability; dependence on Macquarie Power Management Ltd., the manager of the Fund, and potential conflicts of interest; insurance; and risks related to the environmental, health and safety regimes within which the Fund's assets operate. The risks and uncertainties described above are not exhaustive and other events and risk factors, including risk factors disclosed in Fund's filings with Canadian securities regulatory authorities, could cause actual results to differ materially from the results discussed in the forward-looking statements.

(1) Macquarie Capital Markets Canada Ltd. is a wholly-owned subsidiary of Macquarie Group Limited and accordingly is a related party of Macquarie Power Management Ltd., the administrator of the Fund.

Macquarie Power & Infrastructure Income Fund is not an authorised deposit taking institution for the purposes of the Banking Act (Cth) 1959 and Macquarie Power & Infrastructure Income Fund's obligations do not represent deposits or other liabilities of Macquarie Bank Limited ABN 46 008 583 542 (MBL). MBL does not guarantee or otherwise provide assurance in respect of the obligations of Macquarie Power & Infrastructure Income Fund.

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