Subsequent Events

9 Months Ended

Sep. 30, 2019

Subsequent Events [Abstract]

Subsequent Events

Subsequent Events

On November 3, 2019, the Company entered into an Agreement and Plan of Merger (Merger Agreement) with Pacific US Inc. (Parent), a Delaware corporation which is an indirect wholly-owned subsidiary of Canada Pension Plan Investment Board (CPP Investments), and with Pacific BidCo US Inc. (BidCo), a Delaware corporation and a wholly-owned subsidiary of Parent, pursuant to which Parent has agreed to acquire the Company for $26.75 per share in an all-cash transaction. The transaction is expected to close by the second quarter of 2020, subject to certain conditions, including regulatory, shareholder and other related approvals. CPP Investment Board Private Holdings (4) Inc. has provided to the Company a limited guarantee of certain obligations of Parent under the Merger Agreement. The Company has incurred transaction-related costs of approximately $3.0 million and $4.8 million for the three and nine months ended September 30, 2019, respectively as a result of the Merger Agreement.

On October 31, 2019, the Company declared an aggregate dividend for the fourth quarter, payable on January 31, 2020, to holders of record on January 15, 2020 of $3.9 million on the shares of Series A Preferred Stock.

On October 31, 2019, the Company declared a dividend for the fourth quarter, payable on January 31, 2020, to holders of record on December 31, 2019, in the amount of $0.4220 per Class A share, or $1.688 on an annualized basis. This is unchanged from the third quarter of 2019.

In October 2019, the Company consummated the purchase of 101 MW of owned capacity in Grady, a 220 MW Pattern Development project located in Curry County, New Mexico, for total cash consideration of approximately $100 million.

In October 2019, the Company consummated the purchase of 150 MW of owned capacity in Henvey Inlet, a 300 MW Pattern Energy Group LP project located in Henvey Inlet First Nation Reserve No. 2 Lands, Ontario, Canada. Following purchase price adjustments to be made at term conversion, the estimated economic cost to the Company will be approximately $193 million.

In October 2019, the Company consummated an earnout acquisition agreement with Pattern Energy Group LP to acquire 100% of Pattern Energy Group LP's earnout rights in certain transmission and wind projects under development, which represent 25% of the profits interest in such projects, for a purchase price of $10 million.

In October 2019, the Company issued 10.4 million shares of Series A Perpetual Preferred Stock with a par value of $260 million at a 1.5% discount (Preferred Shares). The Preferred Shares are entitled to receive, when declared by the board of directors, cumulative cash dividends at an initial annual rate of 5.625%, based on the $25.00 per share liquidation preference. The annual

dividend rate shall increase by 0.5% every year starting on the third anniversary of issuance date to a maximum of four escalations, or 7.625%. The Preferred Shares are entitled to receive 12.6% of any cash distributions, including the return of capital, made by Pattern Development to the Company or any of its subsidiaries not to exceed $3.25 per Preferred Share. The Company received net proceeds of $256 million which it used to fund the acquisition of Henvey Inlet, partially repay borrowings under the revolving credit facility and pay related expenses and fees.