The Securities Commission has granted Algonquin Power & Utilities Corp. (the Filer) an exemption from certain disclosure and filing requirements typically applicable to selling securityholders in the context of a remarketing of senior notes due 2026. This decision is based on the Filer’s application and representations, which include the following key points:
1. The Filer’s senior notes were initially offered to the public in Canada and the U.S. as part of an offering of equity units.
2. The equity units consist of a purchase contract and a partial beneficial interest in the senior notes.
3. The equity units are traded on the New York Stock Exchange, and the notes were pledged to the Filer to secure payment obligations under the purchase contracts.
4. The Filer plans to file a new base shelf prospectus and subsequent prospectus supplements for the purpose of remarketing the notes, primarily in the U.S.
5. Unitholders have the option to participate in the remarketing by default, unless they opt out.
6. The Filer contends that while the unitholders may technically be considered selling securityholders, they are passive participants and do not actively influence the remarketing process.
The Commission’s decision to grant the exemption is based on the impracticality of complying with the selling securityholder requirements due to the wide distribution of the equity units and limited visibility of the unitholder identities. The exemption relieves the Filer from the obligation to provide certain disclosures and filings for participating securityholders, including the appointment of an agent for service of process for foreign participants and various disclosure requirements outlined in National Instrument 44-101 Short Form Prospectus Distributions and National Instrument 33-105 Underwriting Conflicts.
The decision is supported by the belief that the exemption is consistent with the legislative test and is justified by the circumstances presented by the Filer. The Ontario Securities Commission, acting as the principal regulator, has approved the exemption, which will apply across all Canadian jurisdictions.