TransAlta Corporation Provides Conversion Right and Dividend Rate Notice for Series A and B Preferred Shares
MWN-AI** Summary
TransAlta Corporation, based in Calgary, Alberta, has announced a significant update regarding its Cumulative Redeemable Rate Reset First Preferred Shares, Series A and Series B. On March 2, 2026, the company confirmed it will not redeem the Series A or Series B preferred shares on March 31, 2026, the scheduled Conversion Date.
This decision presents shareholders with options. Those holding Series A Shares can choose to retain their shares and continue receiving a fixed quarterly dividend of 1.19550% (equivalent to 4.78200% annually) for a five-year period or convert them to Series B Shares at a one-to-one ratio, which offers a floating quarterly dividend starting at 1.05236% (4.22100% annually). Conversely, Series B Shareholders can retain their shares for the same floating rate or convert to Series A Shares under the same terms.
Both conversions are contingent upon maintaining a minimum of 1,000,000 shares remaining outstanding in either series post-conversion. Should the number of outstanding shares fall below this threshold, automatic conversions will occur.
Shareholders must submit their election to convert or retain their shares by 3:00 p.m. MST on March 16, 2026. Failure to do so will result in no conversion of their shares, barring automatic conversions.
TransAlta, a major player in the power generation sector across Canada, the United States, and Western Australia, emphasizes its commitment to providing reliable electricity while adapting to evolving energy requirements. Additionally, it reassures investors that these conversion rights will present similar opportunities every five years, enhancing shareholder flexibility in managing their investments.
MWN-AI** Analysis
TransAlta Corporation's recent announcement regarding its preferred shares provides investors with unique conversion options that could significantly affect their financial strategy. The lack of intent to redeem the Series A and Series B Shares on March 31, 2026, means that holders may actively consider their positions in light of the fixed versus floating dividend rates.
For investors holding Series A Shares, retaining them will secure a fixed quarterly dividend of 1.19550%, which annualizes to 4.78200% for the next five years. This provides reliability during a climate of potential interest rate fluctuations. Conversely, the option to convert these shares into the Series B Shares allows for access to a floating rate dividend initially set at 1.05236% (or 4.22100% annually), which could appeal to those anticipating a rise in interest rates and seeking potential gains from fluctuating dividends.
Holders of Series B Shares also face a pivotal decision: they can maintain the floating dividends or convert to the more stable Series A Shares. Given the current economic climate, characterized by uncertainty around interest rates, this decision could tilt based on individual risk tolerance; those favoring stability may prefer Series A, while those willing to accept volatility might lean towards Series B.
It is noteworthy that conversion is contingent upon specific conditions, such as the total shares remaining post-conversion. Thus, investors must act swiftly and ensure they communicate timely with their brokers before the March 16 deadline, or else face an automatic conversion.
In summary, investors should evaluate their market outlook and personal financial goals before making a decision. An active review of both share types’ performance and the underlying market conditions should guide their choice to either retain or convert shares in pursuit of optimal returns.
**MWN-AI Summary and Analysis is based on asking OpenAI to summarize and analyze this news release.
CALGARY, Alberta, March 02, 2026 (GLOBE NEWSWIRE) -- TransAlta Corporation (TransAlta or the Company) (TSX: TA) (NYSE: TAC) announced today that it does not intend to exercise its right to redeem all or any portion of the currently outstanding Cumulative Redeemable Rate Reset First Preferred Shares, Series A (Series A Shares) (TSX: TA.PR.D) and the Cumulative Redeemable Floating Rate First Preferred Shares, Series B (Series B Shares) (TSX: TA.PR.E) on March 31, 2026 (the Conversion Date).
As a result, and subject to certain conditions, the holders of the Series A Shares will have the right to elect to: (a) retain any or all of their Series A Shares and continue to receive a fixed rate quarterly dividend; or (b) convert all or any of their Series A Shares into Series B Shares on the basis of one Series B Share for each Series A Share on the Conversion Date and receive a floating rate quarterly dividend.
Comparably, subject to certain conditions, the holders of the Series B Shares will have the right to elect to: (a) retain any or all of their Series B Shares and continue to receive a floating rate quarterly dividend; or (b) convert all or any of their Series B Shares into Series A Shares on the basis of one Series A Share for each Series B Share on the Conversion Date and receive a fixed rate quarterly dividend.
As provided in the share terms, the foregoing conversion right is subject to the conditions that: (i) if TransAlta determines that there would remain outstanding immediately following the conversion, less than 1,000,000 Series A Shares, holders of Series B Shares shall not be entitled to convert their shares into Series A Shares, and the remaining Series A Shares will automatically convert to Series B Shares, on the Conversion Date; or (ii) if TransAlta determines that there would remain outstanding immediately after the conversion, less than 1,000,000 Series B Shares, holders of Series A Shares shall not be entitled to convert their shares into Series B Shares, and the remaining Series B Shares will automatically convert to Series A Shares, on the Conversion Date. There are currently 9,629,913 Series A Shares outstanding and 2,370,087 Series B Shares.
Should a holder of Series A Shares choose to retain their shares, such shareholders will receive the quarterly fixed dividend rate applicable to Series A Shares of 1.19550% (4.78200% on an annualized basis) for the five-year period from and including March 31, 2026 to but excluding March 31, 2031. Should a holder of Series A Shares choose to convert their shares to Series B Shares, the Series B Shares that may be issued on the Conversion Date will receive the floating quarterly dividend rate applicable to the Series B Shares of 1.05236% (4.22100% on an annualized basis) for the three-month period from and including March 31, 2026 to but excluding June 30, 2026. The floating dividend rate will be reset every quarter.
Should a holder of Series B Shares choose to retain their shares, such shareholders will receive the floating quarterly dividend rate applicable to Series B Shares of 1.05236% (4.22100% on an annualized basis) for the three-month period from and including March 31, 2026 to but excluding June 30, 2026. The floating dividend rate will be reset every quarter. Should a holder of Series B Shares choose to convert their shares to Series A Shares, holders of Series A Shares will receive the fixed quarterly dividend rate applicable to the Series A Shares of 1.19550% (4.78200% on an annualized basis) for the five-year period from and including March 31, 2026 to but excluding March 31, 2031.
The Series A Shares and Series B Shares are issued in book entry only form and must be purchased or transferred through a participant in the CDS depository service (CDS Participant). All rights of holders of Series A Shares and Series B Shares must be exercised through CDS or the CDS Participant through which the shares are held. The deadline for the registered shareholder to provide notice of exercise of the right to convert Series A Shares into Series B Shares, or Series B Shares into Series A Shares, as applicable, is 3:00 p.m. (MST) / 5:00 p.m. (EST) on March 16, 2026. Any notices received after this deadline will not be valid. As such, holders of Series A Shares or Series B Shares who wish to exercise their right to convert their shares should contact their broker or other intermediary for more information and it is recommended that this be done as soon as possible and well in advance of the deadline in order to provide the broker or other intermediary with time to complete the necessary steps.
If TransAlta does not receive an election notice from a holder of Series A Shares or Series B Shares during the time fixed therefor, then such shares shall be deemed not to have been converted (except in the case of an automatic conversion described above). Holders of the Series A Shares and the Series B Shares will have the opportunity to convert their shares again on March 31, 2031, and every five years thereafter as long as the shares remain outstanding. For more information on the terms of the Series A Shares and the Series B Shares, please see TransAlta’s articles of amalgamation, including the share terms and shares in series schedule attached thereto as Schedule A, which are available on the Company’s website under Governance.
About TransAlta Corporation:
TransAlta is one of Canada’s largest publicly traded power generators, delivering reliable electricity across Canada, the United States and Western Australia. For more than 100 years, our people have safely operated and evolved essential energy infrastructure that powers customers and communities. Our technology-diverse portfolio and disciplined execution allow us to deliver dependable power across evolving energy systems. We take a practical, responsible approach to meeting today’s energy needs while building for what comes next.
For more information about TransAlta, visit our web site at transalta.com.
Forward Looking Information
This news release contains certain information that is forward-looking and is subject to important risks and uncertainties (such statements are usually accompanied by words such as “may”, “will”, “should”, “estimate”, “intend” or other similar words). Specifically, this news release contains forward-looking information with respect to the Company and the conversion of the Series A Shares and the Series B Shares. All forward-looking information reflects the Company’s beliefs and assumptions based on information available at the time the statements were made and as such are not guarantees of future performance. Readers are cautioned not to place undue reliance on this forward-looking information, which is given as of the date it is expressed in this news release. TransAlta undertakes no obligation to update or revise any forward-looking information except as required by law. For additional information on the assumptions made, and the risks and uncertainties which could cause actual results to differ from those in the forward-looking information, refer to the Company’s most recent Annual Report and Management’s Discussion and Analysis and the Prospectus Supplement dated Dec. 3, 2010, in each case filed under the Company’s profile on SEDAR at www.sedarplus.com.
For more information:
| Investor Inquiries: | Media Inquiries: |
| Phone: 1-800-387-3598 in Canada and US | Phone: 1-855-255-9184 |
| Email: investor_relations@transalta.com | Email: ta_media_relations@transalta.com |
FAQ**
What are the potential implications for investors in TransAlta Corporation TAC if the conversion rights of Series A and Series B Shares lead to significant changes in the investor base?
How might the decision of TransAlta Corporation TAC not to redeem the Series A and Series B Shares affect its overall financial strategy and future dividend policies?
Given the current outstanding shares of TransAlta Corporation TAC, what factors are likely to influence a shareholder's decision to convert their Series A or Series B Shares?
How does TransAlta Corporation TAC plan to manage risks associated with the forward-looking information in their recent announcements regarding share conversions?
**MWN-AI FAQ is based on asking OpenAI questions about Transalta Corporation (TSXC: TA:CC).
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