EPCOR Increases Equity in Capital Structure

On June 29, 2001, a subsidiary of EPCOR Utilities Inc., EPCOR Finance Corporation, issued $150 million of Cumulative Redeemable Perpetual Preferred Shares by private placement. The preferred shares have a fixed dividend rate of 5.75 per cent for the first five years, after which the dividend rate is subject to reset at either a new mutually agreed fixed rate or, at the option of the holders, a floating rate that varies with the prime interest rate. The shares are redeemable by EPCOR Finance Corporation at certain times, but are not retractable by the holders. EPCOR Finance Corporation has invested the entire proceeds in a perpetual promissory note of EPCOR Utilities Inc., which in turn has applied the funds to repay short-term debt.

The lead agent for the offering was TD Securities Inc., with BMO Nesbitt Burns and Scotia Capital Inc. also acting as agents in the offering.

EPCOR was represented by Andrew Love and Don Tse (corporate), Howard MacKichan (banking) and Harold Jacques (tax) of Macleod Dixon LLP. The agents were represented by Noralee Bradley and Phil Backman (corporate) and Alan Ross (tax) of Bennett Jones LLP.


Philip D. Backman Noralee M. Bradley D. Alan Ross Howard E. MacKichan Don Tse