PARTNERS' EQUITY

6 Months Ended

Jun. 30, 2015

PARTNERS' EQUITY

PARTNERS' EQUITY

NOTE 7PARTNERS’ EQUITY

ATM equity issuance program (ATM program)

In August 2014, the Partnership entered into an Equity Distribution Agreement (the EDA) with five different financial institutions (Managers), pursuant to which the Partnership may from time to time, offer and sell common units having an aggregate offering price of up to $200 million.  Sales of such common units will be made by means of ordinary brokers’ transactions on the New York Stock Exchange (NYSE) at market prices, in block transactions or as otherwise agreed upon by one or more of the Managers and the Partnership.

For the six months ended June 30, 2015, the Partnership issued 396,205 common units under the ATM program generating net proceeds of approximately $25 million, plus $1 million from the General Partner to maintain its effective two percent interest. The commissions to our sales agents for the six months ended June 30, 2015 were approximately $256,000. The net proceeds were used for general partnership purposes.

Issuance of Class B units

On April 1, 2015, we issued 1,900,000 new Class B units to TransCanada with a value of $50 each representing limited partner interests in us, for a total value $95 million. The Class B units contain no mandatory or optional redemption features and are also non-convertible, non-exchangeable, non-voting and rank equally with common units upon liquidation. The Class B units entitle TransCanada to an annual distribution which is an amount based on 30 percent of GTN’s annual distributions as follows: (i) 100 percent of distributions above $20 million through March 31, 2020; and (ii) 25 percent of distributions above $20 million thereafter. Under the terms of the Partnership Agreement, the Class B distribution will initially be calculated to equal 30 percent of GTN’s distributable cash flow for the nine months ending December 31, 2015, less $15 million (refer to Note 6).

The Class B distribution is an annual calculation that will be reflected as an increase in the Class B units’ equity account until such amount is declared for distribution and paid in the first quarter beginning 2016 and annually thereafter.