Capital Power announces commencement of a consent solicitation process for the 7.95% Fixed-to-Fixed Rate Subordinated Notes, Series 1

EDMONTON, Alberta, July 29, 2024 (GLOBE NEWSWIRE) — Capital Power Corporation (“Capital Power”, the “Company”, “we”, “us” or “our”) (TSX: CPX) announced today that it has commenced a solicitation of consents (the “Consent Solicitation”) from holders of its C$350M 7.95% Fixed-to-Fixed Rate Subordinated Notes, Series 1, due September 9, 2082 (the “Series 1 Notes”).

The purpose of the Consent Solicitation is to seek approval from the holders (“Holders”) of record of the Series 1 Notes as of July 26, 2024 (being the record date for the purposes of the Consent Solicitation), of certain proposed amendments (the “Proposed Amendments”) to the Indenture dated as of September 9, 2022 (the “Series 1 Indenture”) pursuant to which the Series 1 Notes were issued and which would be given effect pursuant to a supplemental indenture to the Series 1 Indenture (the “Series 1 Supplemental Indenture”) and which would amend the Series 1 Indenture to include:

1. an exchange right (the “Exchange Right”) that would allow Holders to exchange all outstanding principal amount of their Series 1 Notes for an equal principal amount of a new series of notes (the “Series 3 Notes”) issued under a supplemental indenture to the indenture dated as of June 5, 2024 (the “Series 3 Supplemental Indenture”) having the same economic terms, including but not limited to the interest rate, interest payment dates, maturity date and redemption provisions as the Series 1 Notes (but excluding provisions of the Series 1 Notes regarding delivery of preferred shares upon the occurrence of certain bankruptcy and related events), together with an entitlement under the Series 3 Notes for an amount equal to the interest accrued on the Series 1 Notes that are exchanged (the “Note Exchange”), and
2. a provision that if Holders of not less than 66 2/3% of the aggregate outstanding principal amount of the Series 1 Notes have exercised the resulting Exchange Right, all Series 1 Notes will be automatically exchanged for Series 3 Notes.

In addition to consenting to the Proposed Amendments, each Holder of the Series 1 Notes that consents to the Proposed Amendments will be deemed to have exercised the resulting Exchange Right, subject to the approval of the Proposed Amendments, and to the execution of the Series 1 Supplemental Indenture and the Series 3 Supplemental Indenture.

The removal of the provisions for delivery of preferred shares upon the occurrence of certain bankruptcy and related events from Series 3 Notes would ensure the Series 3 Notes rank equally in right of payment with the C$450M 8.125% Fixed-to-Fixed Subordinated Notes, Series 2, due June 5, 2054 upon the occurrence of certain bankruptcy and related events. Following the completion of the Note Exchange, Morningstar DBRS is expected to confirm the instrument rating of the Series 3 Notes at BB with a Stable trend.

The adoption of the Proposed Amendments requires that an extraordinary resolution be approved by written consent of the Holders of at least 66 2/3% of the aggregate principal amount of the Series 1 Notes.

The deadline for the submission of consents by Holders of Series 1 Notes is no later than 5:00 pm (Toronto Time) on August 14, 2024 (the “Consent Deadline”) subject to modification, waiver, postponement or extension by Capital Power in its sole discretion.

The Proposed Amendments to the Series 1 Indenture and the exercise of the resulting Exchange Right are described in the Consent Solicitation Statement dated July 29, 2024. Holders of the Series 1 Notes are urged to read and carefully consider the information contained in the Consent Solicitation Statement for the detailed terms of the consent solicitations and the procedures for consenting to the Proposed Amendments and the exercise of the resulting Exchange Right.

Capital Power reserves the right to terminate, withdraw, extend or modify the terms of the Consent Solicitation in its sole discretion.

This press release is for informational purposes only and the Consent Solicitation is being made solely on the terms and subject to the conditions set forth in the Consent Solicitation Statement. Further, this press release does not constitute an offer to sell or the solicitation of an offer to buy the Series 1 Notes or any other securities. The Consent Solicitation Statement does not constitute a solicitation of consents in any jurisdiction in which, or to or from any person to or from whom, it is unlawful to make such solicitation under applicable securities laws. Copies of the Consent Solicitation Statements may be obtained from RBC Capital Markets or Scotiabank, the Solicitation Agents for the Consent Solicitation. Computershare Trust Company of Canada has been appointed the tabulation agent with respect to the Consent Solicitation.

Any persons with questions regarding the Consent Solicitation should contact the Solicitation Agents as follows:

Territorial Acknowledgement
In the spirit of reconciliation, Capital Power respectfully acknowledges that we operate within the ancestral homelands, traditional and treaty territories of the Indigenous Peoples of Turtle Island, or North America. Capital Power’s head office is located within the traditional and contemporary home of many Indigenous Peoples of the Treaty 6 Territory and Métis Nation of Alberta Region 4. We acknowledge the diverse Indigenous communities that are located in these areas and whose presence continues to enrich the community.

About Capital Power
Capital Power (TSX: CPX) is a growth-oriented power producer committed to net zero by 2045, with approximately 9,300 MW of power generation at 32 facilities across North America. We prioritize delivering reliable and affordable power communities can depend on today, building clean power systems needed for tomorrow, and creating balanced solutions for our energy future. We are Powering Change by Changing Power^TM.

Forward-looking Information
Certain information in this news release is forward-looking within the meaning of Canadian securities law. Forward-looking information or statements included in this press release are provided to inform the Company’s shareholders and potential investors about possible or assumed future results of operations, descriptions of our business plans and strategies, financial position and the effect of the Proposed Amendments and the Note Exchange on the Series 1 Notes, the Series 3 Notes or on us, including expectations regarding the ratings to be assigned thereto by Morningstar DBRS. This information may not be appropriate for other purposes. The forward-looking information in this press release is generally identified by words such as will, anticipate, believe, plan, intend, target, and expect or similar words that suggest future outcomes.

These statements are based on certain assumptions and analyses made by the Company in light of its experience and perception of historical trends, current conditions and expected future developments, and other factors it believes are appropriate. Although we believe that these statements are based on reasonable assumptions, the Holders should be aware that many important factors could affect our actual financial results, results of operations, the Proposed Amendments, the Note Exchange, the Series 1 Notes or the Series 3 Notes, and could cause actual results to differ materially from those expressed in these forward-looking statements. Such factors include, but are not limited to, those set forth in our integrated annual report for the fiscal year ended December 31, 2023.

Whether actual results, performance or achievements will conform to the Company’s expectations and predictions is subject to a number of known and unknown risks and uncertainties which could cause actual results and experience to differ materially from the Company’s expectations.

Readers are cautioned not to place undue reliance on any such forward-looking statements, which speak only as of the specified approval date. The Company does not undertake or accept any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements to reflect any change in the Company’s expectations or any change in events, conditions or circumstances on which any such statement is based, except as required by law.

For more information, please contact: