Emera offers 50-year subordinated notes that are automatically converted into prefs on an insolvency

In order to help fund its indirect purchase of TECO Energy for approximately U.S.$8.6 billion, Emera is proposing to issue U.S.$1.2 billion of subordinated notes which mature in 2076, are automatically convertible into preferred shares bearing a cumulative dividend equal to the notes’ interest rate on the occurrence of an Emera insolvency (as defined in detail) and accord Emera the right to defer the due date for any given interest coupon for up to five years. The notes are redeemable at Emera’s option at par after June 15, 2026 (at which point, the interest thereon also converts from fixed to floating).

The notes also can be redeemed at par at Emera’s option before that date if it receives a Canadian or U.S. legal opinion that its treatment or intended treatment of the notes in its tax returns (e.g., as to interest deductibility) will not be respected by an applicable tax authority. The Canadian tax disclosure treats the notes as debt, whereas the U.S. tax disclosure is diffident on this issue.

Neal Armstrong. Summary of Emera Prospectus Supplement and Short Form Base Shelf Prospectus under Offerings – Convertible Debentures – Automatically Convertible.