Chemtrade Logistics to redeem, buy back debentures

Mr. Rohit Bhardwaj reports CHEMTRADE LOGISTICS INCOME FUND ANNOUNCES REDEMPTION AND INTENTION TO COMMENCE A SUBSTANTIAL ISSUER BID FOR ITS 6.25% CONVERTIBLE UNSECURED SUBORDINATED DEBENTURES DUE AUGUST 31, 2027 AND INTENTION TO COMMENCE A SUBSTANTIAL ISSUER BID FOR ITS 7.00 Chemtrade Logistics Income Fund is completing a series of strategic transactions aimed at optimizing its capital structure and reducing its exposure to convertible debt instruments. The fund will be redeeming all of its issued and outstanding 6.25 per cent convertible unsecured subordinated debentures due Aug. 31, 2027 (Cusip No. 16387P AL 7), in accordance with the terms of the trust indenture, as amended and supplemented by supplemental indentures thereto, pursuant to which they were issued. In addition, the fund also declared its intention to commence a substantial issuer bid for all of its issued and outstanding 2027 debentures and a substantial issuer bid for all of its issued and outstanding 7.00 per cent convertible unsecured subordinated debentures due June 30, 2028 (Cusip No. 16387P AM 5). Redemption of 2027 debentures and summary of terms of the 2027 offer The fund announced that it will redeem on Nov. 4, 2025, all of its issued and outstanding 2027 debentures in accordance with the terms of the indenture pursuant to which they were issued. Formal notice of redemption is being delivered to the holders of the 2027 debentures today in accordance with the terms of the indenture. On the mandatory redemption date, holders of the 2027 debentures will receive approximately $1,011.1301370 for each $1,000 principal amount of 2027 debentures, representing their par value, plus all accrued and unpaid interest thereon to, but excluding, the mandatory redemption date. The board of trustees of the fund has also authorized a substantial issuer bid for the 2027 debentures pursuant to which the fund will offer to purchase for cancellation up to all of its 2027 debentures at a purchase price of $1,340 in cash per $1,000 principal amount of 2027 debentures. Holders of 2027 debentures who validly tender and do not withdraw their 2027 debentures under the 2027 offer will receive the 2027 offer price, plus a cash payment in respect of all accrued and unpaid interest on such 2027 debentures up to, but excluding, the date they are taken up by the fund pursuant to the 2027 offer. The 2027 offer will expire at 5 p.m. Eastern Time on Nov. 3, 2025, one business day prior to the mandatory redemption date. The 2027 offer will not be conditional upon any minimum number of 2027 debentures being tendered. Any outstanding 2027 debentures not tendered or purchased pursuant to the 2027 offer will be redeemed by the fund on the mandatory redemption date at the redemption price. Any 2027 debentures that are redeemed in connection with the redemption will cease to bear interest from and after the mandatory redemption date. The 2027 debentures are listed and posted for trading on the Toronto Stock Exchange under the symbol CHE.DB.G. As of Sept. 19, 2025, $129.93-million aggregate principal amount of 2027 debentures were issued and outstanding. On Sept. 19, 2025, the last full trading day prior to announcement by Chemtrade of the approval by the board of trustees of the 2027 offer, the closing price of the 2027 debentures was $129.07 per $100 principal amount (or $1,290.70 per $1,000 principal amount) of 2027 debentures. The 2027 offer price of $1,340 per $1,000 principal amount of 2027 debentures represents premiums against the below noted benchmark values of the 2027 debentures (in each case, calculated and presented per $100 principal amount of 2027 debentures), as detailed in an attached table. Summary of terms of the 2028 offer The fund's board of trustees also authorized a substantial issuer bid pursuant to which the fund will offer to purchase for cancellation up to all of its 2028 debentures. Under the 2028 offer, Chemtrade will offer to purchase, at the election of the holders of 2028 debentures, for each $1,000 principal amount of 2028 debentures validly tendered and not withdrawn: Pursuant to a cash election: (i) $1,200 in cash (the 2028 cash purchase price); plus (ii) a cash payment in respect of all accrued and unpaid interest on such 2028 debentures up to, but excluding, the date they are taken up and paid for by the fund pursuant to the 2028 offer; Or pursuant to a debenture election, subject to a minimum debenture tender condition (as defined below) having been met: (i) $1,000 principal amount of 7.00 per cent unsecured subordinated debentures due June 30, 2028 of Chemtrade; plus (ii) $200 in cash; plus (iii) a cash payment in respect of all accrued and unpaid interest on such 2028 debentures up to, but excluding, the date they are taken up and paid for by the fund pursuant to the 2028 offer. The new debentures contemplated under the 2028 debenture election will have terms substantially similar to the 2028 debentures, except: (i) for their date of issue; (ii) that the new debentures will not be convertible into trust units of Chemtrade at the option of the holder; and (iii) the new debentures will not be redeemable by the fund prior to their maturity except in the event of the satisfaction of certain conditions after a change of control has occurred. The conditions for acceptance by the fund of 2028 debentures tendered under the 2028 debenture election will include that: (i) at least $30-million of the principal amount of the 2028 debentures shall have been validly tendered to the 2028 offer under the 2028 debenture election and not withdrawn; and (ii) the TSX shall not have withdrawn its conditional approval for the listing of the new debentures on the TSX. Debentureholders that tender to the 2028 offer and elect the 2028 debenture election will also be provided a subelection option to: (i) elect the 2028 cash election; or (ii) elect to have their tendered 2028 debentures returned, in each case, if the minimum debenture tender condition is not met. The 2028 offer is expected to expire at 5 p.m. Eastern Time on Nov. 3, 2025, unless extended, varied or terminated by the fund. The 2028 debentures are listed and posted for trading on the TSX under the symbol CHE.DB.H. As of Sept. 19, 2025, $110-million aggregate principal amount of 2028 debentures were issued and outstanding. On Sept. 19, 2025, the last full trading day prior to announcement by Chemtrade of the approval by the board of trustees of the 2028 offer, the closing price of the 2028 debentures was $114.29 per $100 principal amount (or $1,142.90 per $1,000 principal amount) of 2028 debentures. The 2028 cash purchase price of $1,200 per $1,000 principal amount of 2028 debentures offered to 2028 debentureholders under the 2028 cash election represents premiums against the noted benchmark values of the 2028 debentures (in each case, calculated and presented per $100 principal amount of 2028 debentures), as detailed in an attached table. Under the 2028 debenture election, the premium represented by the new debentures and 2028 cash premium offered to 2028 debentureholders are the same as the premium offered under the 2028 cash election. Rationale for the offers The board of trustees believes that the making of the 2027 offer and allowing 2027 debentureholders the option to tender for the 2027 offer price prior to the mandatory redemption date and the making of the 2028 offer represent an efficient use of the fund's financial resources, further optimize the fund's capital structure and are in the best interests of the fund. Management also believes that the 2027 offer and the 2028 offer each allow Chemtrade to eliminate the potential dilution from any conversion of the 2027 debentures or 2028 debentures into units prior to their maturity and to reduce its exposure to convertible instruments. From time to time, subject to market conditions, the fund and its subsidiaries may evaluate and pursue other steps to optimize their capital structure and to diversify away from the use of dilutive financing instruments, which may include additional issuances of senior unsecured notes. As of the date hereof, the fund has not made any determination as to a transaction and there is no assurance that any transaction will be undertaken, or the terms or timing of such transaction. "The board's decision to offer to purchase and redeem the 2027 debentures and to offer to purchase the 2028 debentures at the stated premiums remains consistent with our ongoing strategy of optimizing our capital structure," said Rohit Bhardwaj, chief financial officer. "As the 2027 debentures are trading well above their par value, the redemption notice is likely to result in these debentures being converted into units to realize the price appreciation rather than being redeemed at par. We believe the fund's offer to buy both series of the debentures above their current and historic trading price provides debentureholders with a convenient option to crystallize price appreciation. As previously stated, we aim to eliminate potentially dilutive debt instruments from our capital structure and replace them with non-dilutive instruments such as senior notes. The introduction of the 2028 debenture election is intended to provide our debentureholders with an opportunity to exchange their convertible debentures for new non-convertible debentures bearing the same interest rate and maturity date, which we view as an efficient reallocation of capital with no material impact on the fund's overall leverage. Since both the 2027 debentures and 2028 debentures are in the money, our goal is to avoid conversions that may dilute unitholders, as we believe that our units remain undervalued." The cash portion for each of the offers will be financed from the fund's existing credit facilities and/or cash on hand, allowing the fund to further optimize its capital structure by reducing its reliance on convertible instruments. Any 2027 debentures or 2028 debentures taken up and paid for by Chemtrade under the offers will be cancelled. On the mandatory redemption date, Chemtrade will also use cash on hand and/or draws on its credit facilities, to finance the redemption of any 2027 debentures not taken up under the 2027 offer. Chemtrade has sufficient availability under its credit facilities to finance these transactions. The completion and take-up of 2028 debentures under the 2028 offer will not be conditional upon the contemporaneous completion or take-up of 2027 debentures under the 2027 offer. Similarly, the completion and take-up of 2027 debentures under the 2027 offer will not be conditional upon the contemporaneous completion or take-up of 2028 debentures under the 2028 offer. Important information about the offers The full terms and conditions and other details regarding the 2027 offer, including instructions for tendering 2027 debentures to the 2027 offer and the factors considered by the board of trustees in making its decision to approve the 2027 offer, will be included in the formal offer to purchase and issuer bid circular and other related documents relating to the 2027 offer, which are expected to be mailed to the 2027 debentureholders, filed with applicable Canadian Securities Administrators, and made available free of charge on or about Sept. 25, 2025, on SEDAR+. The full terms and conditions and other details regarding the 2028 offer, including instructions for tendering 2028 debentures to the 2028 offer and the factors considered by the board of trustees in making its decision to approve the 2028 offer, will be included in the formal offer to purchase and issuer bid circular and other related documents relating to the 2028 offer, which are expected to be mailed to 2028 debentureholders, filed with applicable Canadian Securities Administrators, and made available free of charge on or about Sept. 25, 2025, on SEDAR+. Debentureholders should carefully read the offer documents relating to the respective offer prior to making a decision with respect to any offer. Each offer will be subject to certain conditions that are typical for a transaction of this nature. PricewaterhouseCoopers LLP was engaged by the board of trustees to prepare and deliver a formal valuation of the fair market value of the 2027 debentures and the fair market value of the 2028 debentures and the new debentures, respectively, in accordance with Multilateral Instrument 61-101, Protection of Minority Security Holders in Special Transactions. The valuations were delivered to the board of trustees on Sept. 21, 2025. Copies of the valuations will be included in the offer documents. Desjardins Capital Markets is acting as dealer-manager and financial adviser to the fund in connection with the offers. Any questions or requests for information may be directed to Computershare Investor Services Inc., as the depositary for the offer, at 1-800-564-6253 (toll-free). The board of trustees has authorized the making of the 2027 offer and 2028 offer. However, none of Chemtrade, the board of trustees, the dealer-manager, the depositary, PwC or any of their respective affiliates makes any recommendation to any debentureholder as to whether to deposit or refrain from depositing all or a portion of their debentures under any of the offers, or as to which form of consideration to elect. Debentureholders must make their own decisions as to whether to deposit or refrain from depositing their debentures to any of the offers, and, if tendered, the amount of their debentures to deposit and the form of consideration to elect, as applicable. Debentureholders are strongly urged to review and evaluate carefully all information in the applicable offer documents once mailed, to consult their own financial, tax and legal advisers, and to make their own decisions as to whether to deposit their 2027 debentures or 2028 debentures under the 2027 offer or 2028 offer, as the case may be, and, if so, what principal amount of debentures to deposit and the form of consideration to elect. All of the 2027 debentures and the 2028 debentures are held in book-entry form through the facilities of CDS Clearing and Depository Services Inc. If you hold 2027 debentures or 2028 debentures through a broker, dealer, commercial bank, trust company or other nominee, you must contact such broker, dealer, commercial bank, trust company or other nominee if you wish to tender such debentures pursuant to the 2027 offer or 2028 offer. You should check with such broker, dealer, commercial bank, trust company or other nominee to determine whether they will charge you a fee for tendering debentures on your behalf. You should also confirm with the broker, dealer, bank, trust company or other nominee any deadlines by which you must provide your tender or deposit instructions, because the relevant deadline set by such nominee may be earlier than the deadlines set forth herein. If you are a holder of debentures that resides outside of Canada and wish to tender debentures to an offer, the company encourages you to contact the depositary at 1-800-564-6253 (toll-free). In connection with today's announcement, the automatic securities purchase plan that Chemtrade previously entered into with its designated broker in connection with its normal course issuer bid for units was automatically terminated in accordance with its terms. The fund will suspend further purchases of units pursuant to its existing normal course issuer bid until the earlier of Aug. 18, 2026, and the date that both offers have expired or terminated. About Chemtrade Logistics Income Fund Chemtrade operates a diversified business providing industrial chemicals and services to customers across North America and around the world. Chemtrade is one of North America's largest suppliers of sulphuric acid, spent acid processing services, inorganic coagulants for water treatment, sodium chlorate, sodium nitrite and sodium hydrosulphite. Chemtrade is also a leading producer of high-purity sulphuric acid for the semiconductor industry in North America. Chemtrade is a leading regional supplier of sulphur, chlor-alkali products and zinc oxide. Additionally, Chemtrade provides industrial services such as processing byproducts and waste streams. We seek Safe Harbor.