Northland Power Income Fund

Northland Power Income Fund

September 24, 2009 16:39 ET

Northland Power Income Fund Announces $120 Million Offering of Trust Units and Convertible Debentures

TORONTO, ONTARIO--(Marketwire - Sept. 24, 2009) -


Northland Power Income Fund ("Northland Power" or the "Fund'")(TSX:NPI.UN) announced today that it has entered into an agreement to sell to a group of underwriters, led by CIBC, 5,830,000 trust units (the "Trust Units") at $10.35 per Trust Unit and $60 million principal amount of 6.25% convertible unsecured subordinated debentures (the "Debentures") for aggregate gross proceeds of approximately $120 million. The Fund has granted the Underwriters an option, exercisable in whole or in part at any time up until 30 days after the Closing Date, to purchase an additional 874,500 Trust Units and $9 million principal amount of Debentures, at the same price. If the Over-allotment Option is exercised in full, the total gross proceeds of the financing will be approximately $138 million.

Proceeds from the Offering will be used, among other things, to finance the Fund's investment in its 86 MW Spy Hill peaking facility to be built near Spy Hill, Saskatchewan. The Fund announced earlier today that it has entered into a 25-year Power Purchase Agreement with SaskPower to supply peaking power to the Saskatchewan utility beginning December 1, 2011. The remaining proceeds from the Offering will be used to finance the Fund's remaining commitments related to the Fund's Jardin d'Eole and Thorold projects, now nearing completion and other business purposes, including repayment of existing credit facilities.

The Debentures will bear interest at a rate of 6.25% per annum payable semi-annually in arrears on June 30 and December 31 in each year commencing on December 31, 2009, and will mature on December 31, 2014 (the "Maturity Date"). The Debentures will be convertible at the holder's option into trust units of Northland Power at any time prior to the earlier of the Maturity Date and the date fixed for redemption at a conversion price of $12.42 per trust unit (the "Conversion Price"). The Debentures will not be redeemable on or before December 31, 2012. After December 31, 2012 and prior to December 31, 2013, the Debentures may be redeemed in whole or in part from time to time at Northland Power's option provided that the volume weighted average trading price for the trust units is not less than 125% of the Conversion Price. On and after December 31, 2013 and prior to the Maturity Date, the Debentures may be redeemed in whole or in part from time to time at Northland Power's option at a price equal to their principal amount plus accrued interest. Subject to regulatory approval, Northland Power may satisfy its obligation to repay the principal amount of the Debentures on redemption or at maturity, in whole or in part, by delivering that number of trust units equal to the amount 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 October 15, 2009, subject to regulatory approval. The Trust Units and 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.

About Northland Power Income Fund

Northland Power Income Fund is a Canadian income trust that indirectly has ownership or economic interests in 10 power projects totaling over 1,100 megawatts ("MWs") (net 872 MWs). The Fund'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 14 years. The Fund's plants are located in Canada, the United States and Germany. The merger with NPI on July 16, 2009 internalized management and provided the Fund with the ability to grow organically by generating its own development opportunities, as well as bringing in NPI's 3,600 MW pipeline of high-quality development prospects.

The Fund's trust units and convertible debentures, which trade on the Toronto Stock Exchange under the symbols NPI.UN and NPI.DB respectively, are qualified investments for RRSPs and DPSPs under the Canadian Income Tax Act. The Fund has in place a distribution re-investment plan that allows 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 2008 annual report, the Fund's Annual Information Form dated March 13, 2009, the Fund's Management Information Circular dated May 1, 2009, and the Supplement to the Management Information Circular dated July 10, 2009 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 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
    Northland Power Income Fund
    Boris Balan
    Director of Communications
    (416) 962-6262 x116
    (416) 962-6266 (FAX)