Summary
ONEOK, Inc. (OKE) filed an 8-K on April 20, 2017, detailing the issuance of 20,000 shares of Series E Non-Voting Perpetual Preferred Stock to its wholly-owned subsidiary, which was immediately contributed to the ONEOK Foundation. This action was taken to support charitable causes and to facilitate the tax treatment of its merger with ONEOK Partners, L.P. The Series E Preferred Stock carries a dividend rate of 5.5% per annum, payable quarterly, and is cumulative. It has a liquidation preference of $1,000 per share.
Key Highlights
- 1ONEOK issued 20,000 shares of Series E Non-Voting Perpetual Preferred Stock, valued at $1,000 per share ($20 million total).
- 2The shares were issued to a wholly-owned subsidiary and immediately contributed to the ONEOK Foundation for charitable purposes.
- 3This issuance is linked to facilitating the tax treatment of the merger with ONEOK Partners, L.P.
- 4The Series E Preferred Stock accrues cumulative dividends at a rate of 5.5% per annum, payable quarterly.
- 5The preferred stock has a liquidation preference of $1,000 per share.
- 6Holders may convert shares to common stock after the tenth anniversary (April 20, 2027), based on a conversion ratio tied to the common stock's volume-weighted average price.
- 7ONEOK has the option to redeem the Series E Preferred Stock after the tenth anniversary at $1,000 per share plus accrued dividends, with a provision for fair market value assessment if held by the Foundation.
Frequently Asked Questions
The issuance of Series E Preferred Stock serves two main purposes: to support the ONEOK Foundation's charitable initiatives and to facilitate the tax treatment of the merger between ONEOK and ONEOK Partners, L.P.
The Series E Preferred Stock has a liquidation preference of $1,000 per share and pays cumulative dividends at a rate of 5.5% per annum, payable quarterly. It is non-voting, except as required by law.
Both conversion into ONEOK common stock (at the holder's option) and redemption by ONEOK are possible on or after the tenth anniversary of April 20, 2017 (i.e., April 20, 2027). The conversion ratio is based on the common stock's average volume-weighted price, and the redemption price is $1,000 per share plus accrued dividends, with an adjustment for fair market value if held by the Foundation at the time of redemption.
Yes, transfers are restricted to ONEOK or its subsidiaries, or must occur through an effective registration statement or an available exemption from registration under federal and state securities laws. Transfers are also restricted to avoid triggering registration requirements under the Securities Exchange Act of 1934.