Capital Power Completes $500M IPO

On July 9, 2009, Capital Power Corporation completed a $500 million initial public offering of its common shares. Capital Power was established by EPCOR Utilities Inc. to hold its power generation assets and to access additional capital necessary for its growth to become a leading North American independent power producer. Both EPCOR and Capital Power are headquartered in Edmonton. The offering, one of the largest IPOs since 2007, was underwritten by a syndicate led by TD Securities Inc. and Goldman Sachs Canada Inc.

Capital Power acquired EPCOR's power generation assets for total consideration of approximately $2.67 billion, which consisted of $468 million in cash, exchangeable limited partner units of Capital Power L.P. (representing approximately a 72 per cent indirect interest in Capital Power) and $896 million of debt.

EPCOR was represented by its general counsel Kathryn Chisholm and an in-house team that included Graham Jones, William Wright, Suzanne Polkosnik, Jamie Pytel, Jason Mudge, Zoltan Nagy-Kovacs, Colleen Legge, Robert Ostapchuk, Boris de Jonge, Charles Casey and Christopher Kopecky. Chisholm, Legge, Jones, Mudge, Nagy-Kovacs, de Jonge, Casey and Kopecky were part of the in-house team that also represented Capital Power and joined Capital Power on closing.

Blake, Cassels & Graydon LLP acted as lead counsel to EPCOR and Capital Power, with a team led by Rob Collins that included Chris Hewat, Frank Arnone, Brendan Reay, Dan McLeod, Aaron Palmer, Ali Naushahi, Matthew Merkley, Sandie Huynh, Gordon McKenna and Michael Smith (securities); Cheryl Satin, Vivek Bakshi, Erin Eizenman and Anat Cole (corporate); Robert Kopstein, Bruce Sinclair and Kirsten Kjellander (tax); Webster Macdonald, David Tupper and Karen McGlone (litigation); Jeffrey Sommers and Jessica Bullock (pensions); Brian Thiessen and Melanie Carroll (employment); Elizabeth Boyd (benefits); Sharon Wong and Carol Hales (regulatory); Robert Fishlock and Duff Harper (environmental); Matthew Flynn (IT) and John Hutmacher and Joseph Grignano (real estate). EPCOR and Capital Power were represented in the US by a team from K&L Gates LLP that included Eric Freedman, Kristy Harlan, Rumei Mistry, Holly Vance and Brianne Anderson (corporate and securities); Michael O'Neil and Lisa Tucker (regulatory); Elizabeth Thomas and Kenneth Gish (environmental); Andrew Zuccotti (tax) and Allen Baden (intellectual property).

Osler, Hoskin & Harcourt LLP represented the underwriters in Canada and the US with a team that included Steven Smith, Desmond Lee, Mark Hogan and Kamal Toor (corporate and securities – Canada); James Lurie and Jason Comerford (corporate and securities – US); Richard Wong, Matthew Keen and Jessica Ng (energy and power); Daniel Kirby and Radha Curpen (environmental); Lida Bucyk (lending); Rod Davidge and Ilana Cohen (real estate); Kimberly Wharram, William Corcoran and Edward Citrome (tax); Colin Feasby (litigation); Evan Howard (pensions) and Kari Abrams (employment).

In connection with its initial public offering, Capital Power successfully negotiated $1.2 billion of new credit facilities for its subsidiary Capital Power L.P. A $700 million syndicated credit facility was established with a group of Canadian and foreign financial institutions. Agency roles for the $700 million facility were filled by TD Securities and RBC Capital Markets (joint lead arrangers and joint bookrunners), The Toronto-Dominion Bank (administrative agent), Royal Bank of Canada (syndication agent) and The Bank of Nova Scotia, Canadian Imperial Bank of Commerce and Bank of Montreal (co-documentation agents). In addition, a $500 million club credit facility was established with The Toronto-Dominion Bank, Royal Bank of Canada, The Bank of Nova Scotia, Canadian Imperial Bank of Commerce, Bank of Montreal, HSBC Bank Canada, National Bank of Canada and several of their US affiliates. TD Securities and RBC Capital Markets served as joint lead arrangers and joint book runners for this facility. Contemporaneously with the Capital Power initial public offering, EPCOR replaced a number of existing credit facilities with an updated $500 million revolving credit facility. Agency roles for this $500 million revolving credit facility were filled by RBC Capital Markets (sole arranger and sole bookrunner), Royal Bank of Canada (administrative agent), CIBC World Markets, TD Securities and BMO Capital Markets (co-syndication agents) and Scotia Capital (documentation agent).

Blake, Cassels & Graydon LLP (Toronto and Calgary) acted for Capital Power on its $700 million syndicated and $500 million club credit facilities and for EPCOR on its $500 million revolving credit facility. The Blakes financing team was led by Ian Binnie and Kevin Fougere, and included Manfred Lam and Tim Theroux.

Macleod Dixon LLP (Calgary) acted for TD Securities and RBC Capital Markets in the establishment of Capital Power's new credit facilities, with a team led by Richard Borden and including Danielle Graham.

Borden Ladner Gervais LLP (Calgary) acted for RBC Capital Markets in connection with EPCOR's $500 million revolving credit facility, with a team led by Thomas Pepevnak and including Lindsay Holmes, Angie Redecopp, Mike Hrabok and Scott McLeman.