Northland Power Income Fund
TSX : NPI.UN

Northland Power Income Fund

July 06, 2010 13:43 ET

Northland Power Income Fund Announces $100 Million Preferred Share Offering

TORONTO, ONTARIO--(Marketwire - July 6, 2010) -

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. 

Northland Power Income Fund ("Northland Power" or the "Fund'") (TSX:NPI.UN) announced today that Northland Power Preferred Equity Inc. (the "Corporation"), an indirect wholly-owned subsidiary of the Fund, will issue in Canada a total of 4 million Cumulative Rate Reset Preferred Shares, Series 1 (the "Series 1 Preferred Shares") guaranteed by the Fund, at a price of $25.00 per share, for aggregate gross proceeds of $100 million, on a bought deal basis to a syndicate of underwriters in Canada led by CIBC.

The holders of Series 1 Preferred Shares will be entitled to receive fixed cumulative dividends at an annual rate of $1.3125 per share, payable quarterly, as and when declared by the Board of Directors of the Corporation. The Series 1 Preferred Shares will yield 5.25% annually at the issue price, for the initial five-year period ending September 30, 2015 with the first dividend payment date scheduled for September 30, 2010, based on an anticipated closing date of July 28, 2010. The dividend rate will reset on September 30, 2015 and every five years thereafter at a rate equal to the then five-year Government of Canada Bond yield plus 2.80%. The Series 1 Preferred Shares are redeemable on or after September 30, 2015.

The holders of Series 1 Preferred Shares will have the right to convert their shares into Cumulative Floating Rate Preferred Shares, Series 2 (the "Series 2 Preferred Shares"), subject to certain conditions, on September 30, 2015 and on September 30 of every fifth year thereafter. The holders of Series 2 Preferred Shares will be entitled to receive quarterly floating rate cumulative dividends, as and when declared by the Board of Directors, at a rate equal to the then three month Government of Canada Treasury Bill yield plus 2.80%.

The Corporation has granted the underwriters an over-allotment option exercisable up to 30 days after closing to purchase up to an additional 600,000 Series 1 Preferred Shares at the issue price on the same terms, for additional gross proceeds of up to $15 million.

The Corporation intends to lend the net proceeds of the offering to NPIF Holdings L.P., a subsidiary of the Fund, which will use the funds in the construction of advanced development projects of the Fund, to repay certain debt and for general corporate purposes.

The Fund's proposed conversion to a corporation has received unitholder approval and the approval of the Ontario Superior Court of Justice and is expected to be completed on January 1, 2011. Under the terms of the conversion as approved, the Corporation will amalgamate with the successor of the Fund and the Series 1 Preferred Shares will become an equal number of preferred shares having the same attributes as the successor to the Fund, which will be called "Northland Power Inc.". If the Corporation does not amalgamate with, or otherwise become, the successor, the successor entity will assume all the obligations of the Fund under the guarantee of the Series 1 and Series 2 Preferred Shares.

The Series 1 and Series 2 Preferred Shares will be offered to the public in Canada pursuant to a short form prospectus that will be filed with securities regulatory authorities in each of the provinces of Canada. The securities referred to herein have not been and will not be registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.

This news release does not constitute an offer to sell or the solicitation of any offer to buy, nor will there be any sale of these securities, in any province, state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such province, state or jurisdiction.

ABOUT THE FUND

Northland is a Canadian income trust that has ownership or economic interests in 10 power projects totaling over 1,100 megawatts ("MW") (net 872 MW). Northland's assets comprise natural-gas-fired plants which efficiently and cleanly produce electricity and steam as well as facilities generating renewable energy from wind and biomass. Sales are made almost entirely under long-term contracts with a current average duration of 13 years. Northland's plants are located in Canada, the United States and Germany. In addition, Northland has the 86 MW Spy Hill project, 260 MW North Battleford project and 216 MW of wind, solar and run-of-river hydro projects awarded under the Ontario Power Authority's Feed-in-Tariff program in advanced stages of development. Northland also has a diverse development portfolio of high-quality 'Clean and Green' energy projects, including wind, solar, natural gas, and hydro assets that supports its strategy of sustainable growth primarily through internally developed opportunities. The Fund's trust units and two series of convertible debentures, which trade on the Toronto Stock Exchange under the symbols NPI.UN, NPI.DB and NPI.DB.A respectively, are qualified investments for RRSPs and DPSPs under the Income Tax Act (Canada). The Fund has in place a distribution re-investment plan that allows its unitholders who are residents of Canada to automatically have their monthly cash distributions reinvested in additional units. Participants do not pay any costs associated with the plan, including brokerage commissions. For further information or to join the plan, contact your financial advisor or broker.

Forward-Looking Statements

Certain statements in this news release, other than statements of historical fact, are forward-looking statements based on certain assumptions and reflect the Fund's and its subsidiaries' current expectations. Forward-looking statements are provided for the purpose of presenting information about management's current expectations and plans relating to the future and readers are cautioned that such statements may not be appropriate for other purposes. These statements may include, without limitation, statements regarding the operations, business, financial condition, priorities, ongoing objectives, strategies and outlook of the Fund's and its subsidiaries' for the current fiscal year and subsequent periods. Forward-looking statements include statements that are predictive in nature, depend upon or refer to future events or conditions, or include words such as "expects", "anticipates", "plans", "believes", "estimates", "intends", "targets", "projects", "forecasts" or negative versions thereof and other similar expressions, or future or conditional verbs such as "may", "will", "should", "would" and "could". This information is based upon certain material factors or assumptions that were applied in drawing a conclusion or making a forecast or projection as reflected in the forward-looking statements, including the perception of historical trends, current conditions and expected future developments, as well as other factors that are believed to be appropriate in the circumstances. Although these forward-looking statements are based upon management's current reasonable expectations and assumptions, they are subject to numerous risks and uncertainties, including those set out in the management's discussion and analysis section of the Fund's 2009 annual report and the Fund's Annual Information Form dated March 31, 2010 certain of which are beyond management's control. The Fund's actual results could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurances can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or what benefits, including the amount of distributions, the Fund and its unitholders will derive therefrom.

The forward-looking statements contained in this news release are made as of the date hereof for the purpose of providing readers with the Fund's expectations for the coming year. The forward-looking statements may not be appropriate for other purposes. Other than as specifically required by law, the Fund undertakes no obligation to update any forward-looking statements to reflect events or circumstances after the date on which such statement is made, or to reflect the occurrence of unanticipated events, whether as a result of new information, future events or results, or otherwise.

Contact Information

  • Northland Power Income Fund
    Barb Bokla
    Manager, Investor Relations
    (416) 962-6262 x156
    or
    Northland Power Income Fund
    Boris Balan
    Director of Communications
    (416) 962-6262 x116
    (416) 962-6266 (FAX)
    info@NPIFund.com
    www.NPIFund.com