Preferred Stock

9 Months Ended

Sep. 30, 2019

REDEEMABLE PREFERRED STOCK

SemGroup redeemable preferred stock

The following table sets forth the preferred stock dividends declared or paid-in-kind for the periods indicated (in thousands):



Quarter Ended	Dividend Paid-In-Kind		Date Paid
March 31, 2018*	$	4,832	May 25, 2018
June 30, 2018	$	6,211	August 29, 2018
September 30, 2018	$	6,317	November 26, 2018
December 31, 2018	$	6,430	March 1, 2019

March 31, 2019	$	6,541	May 20, 2019
June 30, 2019	$	6,657	August 26, 2019
September 30, 2019	$	6,773	November 21, 2019

*Prorated from January 19, 2018 to March 31, 2018

These dividends paid-in-kind increased the liquidation preference such that as of September 30, 2019, the preferred stock was convertible into 11,726,909 shares.

Subsidiary redeemable preferred stock

In conjunction with the formation of our SemCAMS Midstream joint venture, SemCAMS Midstream issued 300,000 shares of cumulative preferred stock with a C$1,000 (US$755 at the September 30, 2019 exchange rate) notional value which pay annual dividends of C$87.50 per share. The preferred stock is redeemable at SemCAMS Midstream’s option subsequent to the third anniversary of issuance at a redemption price of C$1,100 (US$831 at the September 30, 2019 exchange rate) per share. The preferred stock is redeemable by the holder contingent upon a change of control or liquidation of SemCAMS Midstream. The preferred stock is convertible to SemCAMS Midstream common shares in the event of an initial public offering by SemCAMS Midstream.

The preferred stock was issued for proceeds of C$293.7 million (US$223.8 million at the historical rate) which is net of C$6.3 million (US$4.8 million at the historical rate) of costs. As the preferred stock is redeemable after 3 years, we have made a policy election to record the preferred stock at the redemption amount. The accretion to redemption amount is treated as a reduction to SemCAMS common equity held by SemGroup and the noncontrolling interest holders.

Dividends on the preferred stock are payable in-kind for the first ten quarters subsequent to issuance. On April 15, 2019, SemCAMS elected to pay in-kind dividends for the first quarter of 2019 in the amount of C$2.5 million (US$1.9 million at the April 15, 2019 exchange rate), which is prorated for the period from February 25, 2019 to March 31, 2019. On August 13, 2019, SemCAMS elected to pay in-kind dividends for the second quarter of 2019 in the amount of C$6.6 million (US$5.0 million at the August 15, 2019 exchange rate). The dividends paid-in-kind increased the Liquidation Preference such that as of September 30, 2019, the preferred stock was convertible into 309,097 shares.