The Consumers' Waterheater Operating Trust Completes $330M Offering of Notes

On February 13, 2009, The Consumers' Waterheater Operating Trust, a wholly owned subsidiary of The Consumers' Waterheater Income Fund (TSX: CWI.UN), completed an offering of $60 million principal amount of 6.2 per cent senior notes, Series 2009-1, due April 30, 2012, and $270 million principal amount of 6.75 per cent senior notes, Series 2009-2, due April 30, 2014.

The notes were distributed pursuant to a prospectus supplement dated February 6, 2009 under the trust's $650 million base shelf prospectus dated March 19, 2008. The notes have been rated A by DBRS and Standard & Poor's. The notes were issued under the trust's platform indenture dated December 17, 2002 and are secured obligations until repayment of existing AAA-rated senior notes under that indenture. After that repayment, at the trust's option, the notes will become unsecured obligations of the trust, and many of the AAA-related covenants will cease to have effect. The proceeds of the offering were used to refinance the trust's $300 million bridge credit facility and related interest rate hedge arrangements.

The offering was led by TD Securities Inc. and included Scotia Capital Inc., Desjardins Securities Inc. and HSBC Securities (Canada) Inc. In conjunction with the offering, the trust increased its operating line of credit to $50 million.

Torys LLP represented The Consumers' Waterheater Operating Trust, working with its new general counsel John Toffoletto. Torys' team included Simon Knowling, John Toffoletto (prior to his appointment) and James Miller (securities); Corrado Cardarelli and Grace Pereira (tax) and John Cameron (opinions).

McCarthy T├ętrault LLP represented TD Securities Inc. and the syndicate of underwriters with a team that included Andrew Armstrong, Orysia Semotiuk and Gabriel Riff (securities) and James Morand (tax). McCarthy T├ętrault also represented The Toronto-Dominion Bank with a team that included Stephen Furlan and Ana Badour (financial services).


John Toffoletto James Miller James G. Morand Corrado Cardarelli Stephen Furlan Simon C. Knowling R. John Cameron Orysia Semotiuk Grace Pereira