Pembina Pipeline Corporation Announces $225 Million Subordinated Note Offering to Strengthen Balance Sheet and Support Strategic Flexibility
Pembina Pipeline Corporation today announced that it has entered into an agreement to issue an additional $225 million aggregate principal amount of 5.95% Fixed-to-Fixed Rate Subordinated Notes, Series 2 (the “Series 2 Notes”), due June 6, 2055. The new issuance represents a further tranche of Pembina’s existing Series 2 Notes, initially issued on June 6, 2025, in the aggregate principal amount of $200 million. Upon completion of this new offering, the total outstanding Series 2 Notes will increase to $425 million, further enhancing the Company’s long-term capital position and financial flexibility.
The transaction is expected to close on or about October 10, 2025, subject to customary closing conditions. Pembina intends to allocate the net proceeds from this offering primarily toward the redemption of its outstanding Cumulative Redeemable Rate Reset Class A Preferred Shares, Series 9 (TSX: PPL.PR.I) (the “Series 9 Class A Preferred Shares”) and to support general corporate purposes.
Pending final deployment of funds, Pembina may choose to temporarily invest the proceeds in short-term instruments such as bank deposits and other highly liquid money market investments, or to use them to reduce outstanding short-term debt obligations. This strategic approach ensures that the capital raised continues to generate value while awaiting final allocation.
Strategic Purpose of the Offering
The decision to issue an additional $225 million in subordinated notes aligns with Pembina’s broader capital management strategy, which focuses on maintaining a strong balance sheet, optimizing the cost of capital, and providing flexibility for future growth opportunities.
By funding the redemption of the Series 9 Class A Preferred Shares, Pembina will reduce its reliance on higher-cost preferred equity financing while streamlining its capital structure. The move is expected to improve earnings stability and lower the overall cost of financing over time, reflecting the Company’s disciplined approach to financial stewardship.
Moreover, the new Series 2 Notes provide Pembina with long-dated, fixed-rate funding that enhances liquidity without increasing near-term refinancing risk. The 5.95% fixed-to-fixed rate structure ensures predictable interest costs, which is particularly valuable in an environment of evolving interest rate dynamics.
This issuance demonstrates the continued confidence of capital markets in Pembina’s credit quality and long-term business fundamentals. Investors’ strong interest in the Series 2 Notes reinforces Pembina’s reputation as a stable and reliable investment-grade issuer within the North American energy infrastructure sector.
Details of the Offering and Distribution
The Series 2 Notes are being offered through a syndicate of underwriters co-led by CIBC Capital Markets, BMO Capital Markets, and Scotiabank, acting as joint bookrunners. These leading financial institutions bring extensive experience in fixed-income markets and have supported numerous successful offerings for Pembina in the past.
The issuance will be conducted under Pembina’s short form base shelf prospectus dated December 13, 2023, as supplemented by a prospectus supplement expected to be dated on or about October 8, 2025. Together, these documents provide the legal and financial framework for the offering, ensuring full transparency and compliance with Canadian securities regulations.
Pembina’s base shelf prospectus allows it to efficiently access capital markets as needed, supporting the Company’s ability to respond quickly to financing opportunities or market conditions. This proactive capital markets strategy has been a cornerstone of Pembina’s success, enabling it to fund major infrastructure projects, pursue strategic acquisitions, and return value to shareholders through dividends and share repurchases.
Commitment to Financial Strength and Stability
The issuance of the additional Series 2 Notes underscores Pembina’s ongoing commitment to maintaining strong investment-grade credit ratings and a balanced mix of debt and equity in its capital structure. By optimizing financing costs and extending the average maturity of its debt portfolio, Pembina strengthens its resilience against market volatility while preserving flexibility for future capital needs.
Pembina’s prudent approach to financial management has consistently supported its ability to fund significant infrastructure projects and deliver sustainable returns to investors. The Company has long been recognized for its disciplined capital allocation framework, which prioritizes funding growth opportunities that generate attractive long-term returns while maintaining robust liquidity and conservative leverage metrics.
The subordinated nature of the Series 2 Notes provides additional financial cushion to senior debt holders, enhancing overall balance sheet strength. Subordinated debt is an effective instrument for bridging capital structure layers, offering hybrid characteristics between debt and equity. As a result, this instrument supports Pembina’s credit profile and long-term capital efficiency, further enabling the Company to pursue strategic growth initiatives in a capital-efficient manner.
Legal and Regulatory Compliance
As with all public securities offerings, this announcement does not constitute an offer to sell, or the solicitation of an offer to buy, the Series 2 Notes in any jurisdiction where such an offer or sale would be unlawful. The Series 2 Notes have not been and will not be registered under the United States Securities Act of 1933, as amended, nor under any U.S. state securities laws. Accordingly, these securities may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons, except under applicable exemptions from registration requirements.
The Series 2 Notes offering remains subject to approval by all necessary regulatory authorities, including those governing the Toronto Stock Exchange and the New York Stock Exchange, where Pembina’s common shares are listed. Pembina continues to maintain full compliance with all relevant securities legislation and corporate governance standards in both Canada and the United States.
Corporate Overview and Outlook
Pembina Pipeline Corporation is one of Canada’s leading energy infrastructure companies, with a diversified portfolio of integrated transportation, midstream, and marketing assets across North America. The Company provides critical services for the safe and efficient transportation and processing of hydrocarbons, supporting key energy value chains across Western Canada and the United States.
Over its long history, Pembina has demonstrated a consistent track record of financial strength, operational excellence, and shareholder value creation. The Company’s strategy focuses on optimizing its existing asset base, expanding its infrastructure footprint through disciplined investments, and leveraging emerging opportunities in energy transition markets, including carbon capture, hydrogen, and renewable fuels.
Looking forward, Pembina expects to continue enhancing its capital efficiency while prioritizing sustainable growth and environmental stewardship. The Company remains committed to maintaining its strong dividend policy, improving free cash flow generation, and prudently managing debt levels in alignment with its long-term financial framework.
This press release contains forward-looking statements relating to the anticipated completion date of the offering, the intended use of proceeds, and Pembina’s future financial and strategic objectives. These statements are based on current expectations and assumptions that involve risks and uncertainties that could cause actual results to differ materially from those expressed or implied. Factors that could impact these results include changes in market conditions, interest rates, regulatory requirements, and broader economic factors.
Pembina undertakes no obligation to update or revise any forward-looking statements except as required by applicable securities laws.
With the issuance of an additional $225 million in 5.95% Fixed-to-Fixed Rate Subordinated Notes due 2055, Pembina Pipeline Corporation continues to demonstrate its commitment to financial discipline, strategic capital management, and long-term value creation. The transaction not only optimizes the Company’s capital structure but also reinforces its strong standing in the capital markets, positioning Pembina to pursue future growth with confidence and flexibility.