EDMONTON, ALBERTA--(Marketwired - Sept. 22, 2016) -
NOT FOR DISTRIBUTION INTO THE UNITED STATES OR TO UNITED STATES WIRE SERVICES
Capital Power Corporation ("Capital Power") (TSX:CPX) announced today that it will issue 6,000,000 Cumulative Minimum Rate
Reset Preference Shares, Series 7 (the "Series 7 Shares") at a price of $25.00 per Series 7 Share (the "Offering") for aggregate
gross proceeds of $150 million on a bought deal basis with a syndicate of underwriters, co-led by TD Securities Inc. and CIBC
Capital Markets. In addition, Capital Power has granted the underwriters an option, exercisable in whole or in part anytime up to
two business days prior to closing, to purchase up to an additional 2,000,000 Series 7 Shares on the same terms, for additional
gross proceeds of up to $50 million.
The Series 7 Shares will pay fixed cumulative dividends of $1.50 per share per annum, yielding 6.00% per annum, payable on the
last business day of March, June, September and December of each year, as and when declared by the board of directors of Capital
Power, for the initial period ending December 31, 2021. Based on an October 4, 2016 closing, the first quarterly dividend of
$0.3616 per share is expected to be paid on December 30, 2016. The dividend rate will be reset on December 31, 2021 and every
five years thereafter at a rate equal to the sum of the then five-year Government of Canada bond yield and 5.26%, provided that,
in any event, such rate shall not be less than 6.00%. The Series 7 Shares are redeemable by Capital Power, at its option, on
December 31, 2021 and every five years thereafter.
Holders of Series 7 Shares will have the right to convert all or any part of their shares into Cumulative Floating Rate
Preference Shares, Series 8 (the "Series 8 Shares"), subject to certain conditions, on December 31, 2021 and every five years
thereafter. Holders of Series 8 Shares will be entitled to receive a cumulative quarterly floating dividend at a rate equal to
the sum of the then 90-day Government of Canada Treasury Bill yield plus 5.26%, as and when declared by the board of directors of
Capital Power.
Net proceeds of the offering will be used to reduce indebtedness under Capital Power's credit facilities.
Standard & Poor's, a division of the McGraw Hill Companies, Inc. has assigned a provisional rating of P-3 for the Series 7
Shares and DBRS Limited has assigned a preliminary rating of Pfd-3 (low) for the Series 7 Shares.
The Series 7 Shares will be issued pursuant to a prospectus supplement to Capital Power's short form base shelf prospectus
dated May 3, 2016. This prospectus supplement will be filed with securities regulatory authorities in Canada. The Offering is
subject to receipt of all necessary regulatory and stock exchange approvals.
Neither the Series 7 Shares nor the Series 8 Shares have been registered under the U.S. Securities Act of 1933, as amended,
and neither may be offered or sold in the United States or to, or for the account or benefit of, U.S. persons absent registration
or an applicable exemption from registration requirements. This news release does not constitute an offer to sell or the
solicitation of an offer to buy any security, and shall not constitute an offer, solicitation or sale of the securities in any
state in which such offer, solicitation or sale would be unlawful.
Forward-Looking Information
Certain information in this news release relating to Capital Power is forward-looking information and related to anticipated
events and strategies. When used in this context, words such as "will", "anticipate", "believe", "plan", "intend", "target" and
"expect" or similar words suggest future outcomes. By their nature, such statements are subject to significant risks and
uncertainties, which include, but are not limited to, regulatory and government decisions, economic conditions, and availability
and cost of financing.
All forward-looking information or statements reflect Capital Power's assumptions and analyses made by Capital Power in light
of its experience and perception of historical trends, current conditions and expected future developments, and other factors it
believes are appropriate. Readers are cautioned not to place undue reliance on this forward-looking information. Capital Power
undertakes no obligation to update or revise any forward-looking information except as required by law. For additional
information on the assumptions made, and the risks and uncertainties which could cause actual results to differ from the
anticipated results, refer to Capital Power's Management's Discussion and Analysis dated and filed February 18, 2016 under
Capital Power's profile on SEDAR at http://www.sedar.com/ and other reports
filed by Capital Power with Canadian securities regulators.
About Capital Power
Capital Power (TSX:CPX) is a growth-oriented North American power producer headquartered in Edmonton, Alberta. The company
develops, acquires, operates and optimizes power generation from a variety of energy sources. Capital Power owns more than 3,200
megawatts of power generation capacity at 18 facilities across North America. More than 700 megawatts of owned generation
capacity is in advanced development in Alberta and under construction in Kansas.