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Parkland Debt Instruments

Parkland maintains a revolving credit facility, a senior unsecured bond, and two publicly traded subordinate convertible debentures.  The Credit Facility is for a maximum amount of $320,000 and US$30,000 with interest only payable at the bank’s Canadian and US prime lending rate plus 0.50% to 1.75% per annum.

InstrumentSymbolCouponMaturityConversion Price
$200M Senior Notes N/A 5.50% May 28, 2021 N/A
$200M Senior Notes N/A 6.00% Nov 21, 2022 N/A
$300M Senior Notes N/A 5.75% Sept 16, 2024 N/A
$500M Senior Notes N/A 5.625% May 9, 2025 N/A

Debt Ratings

 S&PDBRS
Corporate BB- BB
5.5% Senior Notes Due 2021 BB- BB
6.0% Senior Notes Due 2022 BB- BB
5.75% Senior Notes Due 2024 BB- BB
5.625% Senior Notes Due 2025 BB- BB

Series 1 Debenture Quick Facts

Aggregate original principal amount: $85,000,000
Coupon: 6.5%
Interest Schedule: Payable semi-annually in arrears on November 30 and May 31 in each year commencing May 31, 2010.
Maturity date: November 30, 2014
Conversion Price: $14.60
Conversion Ratio: 6.85

Redemption

The Debentures will not be redeemable before November 30, 2012.

On or after November 30, 2012 and prior to November 30, 2013, the Debentures may be redeemed in whole or in part at the option of Parkland Fuel Corporation on not more than 60 days and not less than 30 days prior notice at a price equal to the principal amount thereof plus accrued and unpaid interest, provided that the "current market price" (as defined herein) of the Common Shares of Parkland Fuel Corporation (the "Common Shares") on the date immediately preceding the date on which the notice of redemption is given is not less than 125% of the Conversion Price (as defined herein).

On or after November 30, 2013 and prior to the Maturity Date, the Debentures may be redeemed in whole or in part at a price equal to their principal amount plus accrued and unpaid interest.

Debenture Conversion Privilege

Each Debenture will be convertible into Common Shares at the option of the holder (the "Debt holder") at any time prior to the close of business on the earlier of the Maturity Date and the business day immediately preceding the date specified by Parkland Fuel Corporation for redemption of the Debentures, at a conversion price of $14.60 per Common Share (the "Conversion Price"), subject to adjustment in certain events. Debt holders converting their Debentures will receive accrued and unpaid interest thereon for the period from the date of the last interest payment thereon to the date of conversion.

Maturity

Upon the maturity or redemption of the Debentures, Parkland Fuel Corporation may pay the outstanding principal of the Debentures in cash or may at its option, on not greater than 60 days and not less than 40 days prior notice and subject to regulatory approval, elect to satisfy its obligations to repay all or a portion of the principal amount of the Debentures which have matured or been redeemed by issuing and delivering that number of Common Shares obtained by dividing the aggregate principal amount of the Debentures which have matured or redeemed by 95% of the weighted average trading price of the Common Shares on the Toronto Stock Exchange (the "TSX") for the 20 consecutive trading days ending five trading days preceding the date fixed for redemption or the Maturity Date, as the case may be. Any accrued and unpaid interest thereon will be paid in cash.

Series 2 Debenture Quick Facts

Aggregate original principal amount: $45,000,000
Coupon: 5.75%
Interest Schedule: Payable semi-annually in arrears on June 30 and December 31 in each year commencing June 30, 2011 and continuing until and including December 31, 2015.
Maturity date: December 31, 2015
Conversion Price: $18.00
Conversion Ratio: 5.56

Redemption

The Debentures will not be redeemable before December 31, 2013.

On or after December 31, 2013 and prior to December 31, 2014, the Debentures may be redeemed in whole or in part at the option of Parkland Fuel Corporation ("Parkland Fuel") on not more than 60 days and not less than 30 days prior notice at a price equal to the principal amount thereof plus accrued and unpaid interest, provided that the "current market price" (as defined herein) of the Common Shares of Parkland Fuel (the "Common Shares") on the date immediately preceding the date on which the notice of redemption is given is not less than 125% of the Conversion Price.

On or after December 31, 2014 and prior to the Maturity Date, the Debentures may be redeemed in whole or in part at a price equal to their principal amount plus accrued and unpaid interest.

Debenture Conversion Privilege

Each Debenture will be convertible into Common Shares at the option of the holder (the "Debentureholder") at any time prior to the close of business on the earlier of the Maturity Date and the business day immediately preceding the date specified by Parkland Fuel for redemption of the Debentures, at a conversion price of $18.00 per Common Share (the "Conversion Price"), subject to adjustment in certain events. Debentureholders converting their Debentures will receive accrued and unpaid interest thereon for the period from the date of the last interest payment thereon to the date of conversion.

Maturity

Upon the maturity or redemption of the Debentures Parkland Fuel may pay the outstanding principal of the Debentures in cash or may at its option, on not greater than 60 days and not less than 40 days prior notice and subject to regulatory approval, elect to satisfy its obligations to repay all or a portion of the principal amount of the Debentures which have matured or been redeemed by issuing and delivering that number of Common Shares obtained by dividing the aggregate principal amount of the Debentures which have matured or redeemed by 95% of the weighted average trading price of the Common Shares on the Toronto Stock Exchange (the "TSX") for the 20 consecutive trading days ending five trading days preceding the date fixed for redemption or the Maturity Date, as the case may be. Any accrued and unpaid interest thereon will be paid in cash.

5.5% Senior Notes Due 2021

Aggregate original principal amount: $200,000,000
Coupon: 5.5%
Interest Schedule: Payable semi-annually in arrears on May 28 and November 28 of each year (or if such day is not a business day, the next following business day) commencing on November 28, 2014.
Maturity date: May 28, 2021

Redemption

Parkland has the option to redeem all or part of the notes at any time on or after May 28, 2017 at the redemption prices set forth in the Offering Memorandum. In addition, before May 28, 2017, Parkland may redeem up to 35% of the aggregate principal amount of the notes with the net cash proceeds of certain equity offerings at the redemption price set forth in this Offering Memorandum. At any time prior to May 28, 2017, Parkland may also redeem the notes, in whole or in part, at 100% of the principal amount plus a “make whole” premium. See “Description of the Notes — Optional Redemption”. In addition, upon the occurrence of a Change of Control (as defined in the Offering Memorandum) Parkland may be required to repurchase the notes from holders at a purchase price equal to 101% of the principal amount of the notes. See “Description of the Notes — Change of Control”.

6.0 % Senior Notes Due 2022

Aggregate original principal amount: $200,000,000
Coupon: 6.0%
Interest Schedule: Payable semi-annually in arrears on May 21 and November 21 of each year (or if such day is not a business day, the next following business day) commencing on May 21, 2014.
Maturity date: November 21, 2022

Redemption

Parkland has the option to redeem all or part of the notes at any time on or after November 21, 2017 at the redemption prices set forth in this Offering Memorandum. In addition, before November 21, 2017, Parkland may redeem up to 35% of the aggregate principal amount of the notes with the net cash proceeds of certain equity offerings at the redemption price set forth in this Offering Memorandum. At any time prior to November 21, 2017, Parkland may also redeem the notes, in whole or in part, at 100% of the principal amount plus a “make whole” premium. See “Description of the Notes — Optional Redemption”. In addition, upon the occurrence of a Change of Control (as defined herein) Parkland may be required to repurchase the notes from holders at a purchase price equal to 101% of the principal amount of the notes. See “Description of the Notes — Change of Control”.

Forward Looking Information
Certain information included herein is forward-looking. Forward-looking statements include, without limitation, statements regarding Parkland’s future financial position, business and growth strategies, including the manner in which such strategies will be implemented, budgets, projected costs, sources of growth, capital expenditures, financial results, taxes, future acquisitions and the efficiencies to be derived therefrom, effectiveness of internal controls, sources of funding for growth capital expenditures, anticipated dividends and the amount thereof, if any, to be declared by Parkland Fuel Corporation, and plans and objectives of or involving Parkland. Many of these statements can be identified by looking for words such as “believe”, “expects”, “expected”, “will”, “intends”, “projects”, “projected”, “anticipates”, “estimates”, “continues”, or similar words and include, but are not limited to, statements regarding the accretive effects of acquisitions and the anticipated benefits of acquisitions. Parkland believes the expectations reflected in such forward-looking statements are reasonable but no assurance can be given that these expectations will prove to be correct and such forward-looking statements should not be unduly relied upon. Forward-looking statements are not guarantees of future performance and involve a number of risks and uncertainties some of which are described in Parkland’s annual information form and other continuous disclosure documents. Such forward-looking statements necessarily involve known and unknown risks and uncertainties and other factors, which may cause Parkland’s actual performance and financial results in future periods to differ materially from any projections of future performance or results expressed or implied by such forward-looking statements. Such factors include, but are not limited to: failure to obtain necessary regulatory or other third party consents and approvals; the failure to achieve the anticipated benefits of acquisitions; general economic; market and business conditions; industry capacity; competitive action by other companies; refining and marketing margins; the ability of suppliers to meet commitments; actions by governmental authorities including increases in taxes; changes in environmental and other regulations; and other factors, many of which are beyond the control of Parkland. Any forward-looking statements are made as of the date hereof and Parkland does not undertake any obligation, except as required under applicable law, to publicly update or revise such statements to reflect new information, subsequent or otherwise.

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