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TransAlta Corporation Application for Debt Financing Approvals, AUC Decision 27452-D01-2022

Link to Decision Summarized

Electricity – Market

Application

TransAlta Corporation (“TransAlta”) applied to the AUC to authorize the issuance of debt securities of up to US$2 billion (the “Debt Securities”) in one or more offerings, pursuant to s. 101(2)(a)(ii) of the Public Utilities Act (“PUA”).

Decision

The AUC approved the application from TransAlta Corporation to authorize the issuance of debt securities of up to US$2 billion, as filed. The AUC approved the purposes of the offerings and steps taken to ensure that the issuances through the offering are made in accordance with the law.

Applicable Legislation

AUC Rule 031: Conditional Exemption from Specific Financing and Reporting Requirements.

Public Utilities Act, RSA 2000, c P-45 – s 101.

Public Utilities Designation Regulation, Alta Reg 194/2006.

Pertinent Issues

TransAlta applied for an order authorizing the Debt Securities issuances by way of a public offering in Canada or the United States and through a private offering. This offering would provide TransAlta with the ability to redeem, purchase or refinance, in whole or in part, its existing debt and/or its affiliates or subsidiaries and for general corporate purposes not related to the ownership of transmission assets.

TransAlta stated that it would not issue more than US$2 billion of Debt Securities, in total, under both shelf prospectuses in one or more issuances over the lives of the shelf prospectuses.

Section 101(2)(a)(ii) of the PUA requires that the AUC determine (a) whether the proposed issuance is to be made in accordance with the law and (b) whether the AUC is satisfied regarding the purposes of the proposed debt issuance described in the application.

Following a review of the June 14, 2022, opinion provided by TransAlta’s legal counsel, Norton Rose Fulbright Canada LLP, the AUC was satisfied that TransAlta exercised due diligence and took steps to ensure that the Debt Securities issuances by way of the offering will be made following the law. As the AUC was satisfied that the proposed issuance would meet the corporate and securities law requirements applicable to such transactions, it determined that the requirements of s. 101(2)(a)(ii) of the PUA have been met. The AUC was also satisfied with the level of detail provided in the application to support the purposes of the issuances and accepted TransAlta’s submitted purposes of the Debt Securities issuances.

The AUC accepted TransAlta’s submitted purposes of the Debt Securities issuances by way of an offering. The AUC was satisfied that the offering would not impact TransAlta’s transmission assets or revenue requirements and that no portion of the cost of the Debt Securities issuances will be billed to TransAlta’s rate base.

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