Chemtrade Logistics Income Fund (TSX: CHE.UN) (“Chemtrade” or the “Fund”) announced today that it will redeem on May 4, 2023 (the “Redemption Date”) $100 million aggregate principal amount of its 4.75% convertible unsecured subordinated debentures due May 31, 2024 (the “2024 Debentures”) in accordance with the terms of the trust indenture, as amended and supplemented by supplemental indentures thereto (collectively, the “Indenture”), pursuant to which they were issued (the “Partial Redemption”).
On the Redemption Date, holders of the 2024 Debentures to be redeemed in connection with the Partial Redemption will receive approximately $1,020.1712 for each $1,000 principal amount of 2024 Debentures, representing their par value, plus all accrued and unpaid interest thereon to but excluding the Redemption Date. The 2024 Debentures that are redeemed in connection with the Partial Redemption will cease to bear interest from and after the Redemption Date.
The record date for determining the holders whose 2024 Debentures are to be redeemed shall be May 1, 2023. The 2024 Debentures shall be redeemed on a pro rata basis to the nearest multiple of $1,000 in accordance with the principal amount of the 2024 Debentures registered in the name of each holder, or in such other manner as deemed equitable, subject to any applicable regulatory approvals.
Formal notice of redemption is being delivered to the holders of the 2024 Debentures today in accordance with the terms of the Indenture. The aggregate amount of 2024 Debentures outstanding as of the date hereof is $201,115,000. Following the Partial Redemption, $101,115,000 aggregate principal amount of the 2024 Debentures are expected to remain outstanding and shall continue to be subject to the terms of the Indenture.
Chemtrade will use the net proceeds of its previously-announced public offering of 7.00% convertible unsecured subordinated debentures due June 30, 2028, together with cash on hand, to fund the Partial Redemption.