Capital Power announces commencement of a consent solicitation process for the 7.95% Fixed-to-Fixed Rate Subordinated Notes, Series 1

July 29, 2024

EDMONTON, Alberta – Capital Power Corporation (“Capital Power”, the “Company”, “we”, “us” or “our”) (TSX: CPX) announced today that it has commenced a solicitation of consents (the “Consent Solicitation”) from holders of its C$350M 7.95% Fixed-to-Fixed Rate Subordinated Notes, Series 1, due September 9, 2082 (the “Series 1 Notes”).

The purpose of the Consent Solicitation is to seek approval from the holders (“Holders”) of record of the Series 1 Notes as of July 26, 2024 (being the record date for the purposes of the Consent Solicitation), of certain proposed amendments (the “Proposed Amendments”) to the Indenture dated as of September 9, 2022 (the “Series 1 Indenture”) pursuant to which the Series 1 Notes were issued and which would be given effect pursuant to a supplemental indenture to the Series 1 Indenture (the “Series 1 Supplemental Indenture”) and which would amend the Series 1 Indenture to include:

1. 1. an exchange right (the “Exchange Right”) that would allow Holders to exchange all outstanding principal amount of their Series 1 Notes for an equal principal amount of a new series of notes (the “Series 3 Notes”) issued under a supplemental indenture to the indenture dated as of June 5, 2024 (the “Series 3 Supplemental Indenture”) having the same economic terms, including but not limited to the interest rate, interest payment dates, maturity date and redemption provisions as the Series 1 Notes (but excluding provisions of the Series 1 Notes regarding delivery of preferred shares upon the occurrence of certain bankruptcy and related events), together with an entitlement under the Series 3 Notes for an amount equal to the interest accrued on the Series 1 Notes that are exchanged (the “Note Exchange”), and
   2. a provision that if Holders of not less than 66 2/3% of the aggregate outstanding principal amount of the Series 1 Notes have exercised the resulting Exchange Right, all Series 1 Notes will be automatically exchanged for Series 3 Notes.

In addition to consenting to the Proposed Amendments, each Holder of the Series 1 Notes that consents to the Proposed Amendments will be deemed to have exercised the resulting Exchange Right, subject to the approval of the Proposed Amendments, and to the execution of the Series 1 Supplemental Indenture and the Series 3 Supplemental Indenture.

The removal of the provisions for delivery of preferred shares upon the occurrence of certain bankruptcy and related events from Series 3 Notes would ensure the Series 3 Notes rank equally in right of payment with the C$450M 8.125% Fixed-to-Fixed Subordinated Notes, Series 2, due June 5, 2054 upon the occurrence of certain bankruptcy and related events. Following the completion of the Note Exchange, Morningstar DBRS is expected to confirm the instrument rating of the Series 3 Notes at BB with a Stable trend.

The adoption of the Proposed Amendments requires that an extraordinary resolution be approved by written consent of the Holders of at least 66 2/3% of the aggregate principal amount of the Series 1 Notes.

The deadline for the submission of consents by Holders of Series 1 Notes is no later than 5:00 pm (Toronto Time) on August 14, 2024 (the “Consent Deadline”) subject to modification, waiver, postponement or extension by Capital Power in its sole discretion.

The Proposed Amendments to the Series 1 Indenture and the exercise of the resulting Exchange Right are described in the Consent Solicitation Statement dated July 29, 2024. Holders of the Series 1 Notes are urged to read and carefully consider the information contained in the Consent Solicitation Statement for the detailed terms of the consent solicitations and the procedures for consenting to the Proposed Amendments and the exercise of the resulting Exchange Right.

Capital Power reserves the right to terminate, withdraw, extend or modify the terms of the Consent Solicitation in its sole discretion.

This press release is for informational purposes only and the Consent Solicitation is being made solely on the terms and subject to the conditions set forth in the Consent Solicitation Statement. Further, this press release does not constitute an offer to sell or the solicitation of an offer to buy the Series 1 Notes or any other securities. The Consent Solicitation Statement does not constitute a solicitation of consents in any jurisdiction in which, or to or from any person to or from whom, it is unlawful to make such solicitation under applicable securities laws. Copies of the Consent Solicitation Statements may be obtained from RBC Capital Markets or Scotiabank, the Solicitation Agents for the Consent Solicitation. Computershare Trust Company of Canada has been appointed the tabulation agent with respect to the Consent Solicitation.

Any persons with questions regarding the Consent Solicitation should contact the Solicitation Agents as follows:

RBC CAPITAL MARKETS
200 Bay Street, Royal Bank Plaza
North Tower, 2nd Floor
Toronto, Ontario M5J 2W7

Attention: Liability Management Group
Telephone (Local): (416) 842-6311
Telephone (Toll-Free): (877) 381-2099
E-Mail: liability.management@rbccm.com

Territorial Acknowledgement

In the spirit of reconciliation, Capital Power respectfully acknowledges that we operate within the ancestral homelands, traditional and treaty territories of the Indigenous Peoples of Turtle Island, or North America. Capital Power’s head office is located within the traditional and contemporary home of many Indigenous Peoples of the Treaty 6 Territory and Métis Nation of Alberta Region 4. We acknowledge the diverse Indigenous communities that are located in these areas and whose presence continues to enrich the community.

About Capital Power

Capital Power (TSX: CPX) is a growth-oriented power producer committed to net zero by 2045, with approximately 9,300 MW of power generation at 32 facilities across North America. We prioritize delivering reliable and affordable power communities can depend on today, building clean power systems needed for tomorrow, and creating balanced solutions for our energy future. We are Powering Change by Changing Power^TM.

Contact

Media Relations

Katherine Perron
(780) 392-5335
kperron@capitalpower.com

Investor Relations

Roy Arthur
(403) 736-3315
investor@capitalpower.com

NT4