Potash Corporation of Saskatchewan Inc.
National Policy 11-206 Process for Cease to be a Reporting Issuer Applications – Application for an order that the issuer is not a reporting issuer under applicable securities laws – Issuer is a wholly-owned subsidiary of a reporting issuer subsequent to a plan of arrangement – More than 15 security holders in any jurisdiction of Canada and more than 50 security holders worldwide – Order granted.
Applicable Legislative Provisions
Securities Act, R.S.O. 1990, c. S.5, as am., s. 1(10)(a)(ii).
May 15, 2018
IN THE MATTER OF
THE SECURITIES LEGISLATION OF
SASKATCHEWAN AND ONTARIO
IN THE MATTER OF
THE PROCESS FOR CEASE TO BE
A REPORTING ISSUER APPLICATIONS
IN THE MATTER OF
POTASH CORPORATION OF SASKATCHEWAN INC.
The securities regulatory authority or regulator in Saskatchewan and Ontario (each a Dual Exemptive Relief Decision Maker) has received an application from the Filer for an order under the securities legislation of the Jurisdictions (the Legislation) that the Filer has ceased to be a reporting issuer in all jurisdictions of Canada in which it is a reporting issuer (the Reporting Issuer Relief).
The securities regulatory authority or regulator in Saskatchewan (the OTC Relief Decision Maker) has received an application from the Filer for an order under the securities legislation of Saskatchewan that it is exempt from being designated a reporting issuer under section 3 of Multilateral Instrument 51-105 Issuers Quoted in the U.S. Over-the-Counter Markets (MI 51-105) (the OTC Relief).
Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a hybrid application):
(a) the Financial and Consumer Affairs Authority of Saskatchewan is the principal regulator for this application,
(b) the Filer has provided notice that subsection 4C.5(1) of Multilateral Instrument 11-102 Passport System (MI 11-102) is intended to be relied upon in British Columbia, Alberta, Manitoba, Québec, New Brunswick, Nova Scotia, Prince Edward Island and Newfoundland and Labrador in respect of the Reporting Issuer Relief,
(c) this order is the order of the principal regulator and evidences the decision of the securities regulatory authority or regulator in Ontario in respect of the Reporting Issuer Relief, and
(d) this order evidences the decision of the securities regulatory authority or regulator in Saskatchewan in respect of the OTC Relief.
Terms defined in National Instrument 14-101 Definitions and MI 11-102 have the same meaning if used in this order, unless otherwise defined.
This order is based on the following facts represented by the Filer:
1. The Filer is a corporation governed by the Canada Business Corporations Act (the CBCA). The head office of the Filer is located in Saskatoon, Saskatchewan.
2. The Filer is currently a reporting issuer in each of the Jurisdictions and in British Columbia, Alberta, Manitoba, Québec, New Brunswick, Nova Scotia, Prince Edward Island and Newfoundland Labrador (collectively with the Jurisdictions, the Reporting Jurisdictions) and is not in default of its obligations under the securities laws of the Reporting Jurisdictions.
3. Effective January 1, 2018, the Filer and Agrium Inc. (Agrium) completed a merger of equals pursuant to a plan of arrangement (the Arrangement) under Section 192 of the CBCA. Pursuant to the Arrangement, all of the issued and outstanding common shares of the Filer (the PotashCorp Shares) and Agrium where acquired, directly or indirectly, by Nutrien Ltd. (Nutrien). As a result, the Filer is an indirect wholly-owned subsidiary of Nutrien.
4. Following completion of the Arrangement, the PotashCorp Shares were delisted from the Toronto Stock Exchange (the TSX) and the New York Stock Exchange (the NYSE) and the Filer ceased to have any statutory reporting obligations in the United States with the United States Securities and Exchange Commission (the SEC) (with the exception of certain post-closing filings in respect of financial year ended December 31, 2017 which have since been made by the Filer).
5. In connection with the Arrangement, each equity incentive award of the Filer was assumed or replaced by Nutrien based upon the applicable exchange ratio under the Arrangement. Nutrien also assumed the obligations in respect of awards under the Filer's non-equity based incentive compensation plans. As a result, there are no incentive awards that are convertible or exchangeable into, or based on the price of, securities of the Filer.
6. Nutrien is a corporation governed by the CBCA. The head office of Nutrien is located in Saskatoon, Saskatchewan.
7. Nutrien is a reporting issuer in each of the Reporting Jurisdictions. Nutrien is a registrant with the SEC under the securities laws of the United States.
8. The common shares of Nutrien are listed and posted for trading on the TSX and the NYSE under the symbol “NTR”.
9. The authorized capital of the Filer consists of an unlimited number of PotashCorp Shares and an unlimited number of first preferred shares. As of the date hereof, Nutrien is the sole beneficial holder of all of the issued and outstanding PotashCorp Shares and no preferred shares are outstanding.
10. Prior to the Exchange Offers (as defined below), the Filer had the following principal amounts of senior unsecured notes outstanding (collectively, the Notes):
(a) US$500 million principal amount of 6.500% Senior Notes due 2019 (the 2019 Notes);
(b) US$500 million principal amount of 4.875% Senior Notes due 2020 (the 2020 Notes);
(c) US$750 million principal amount of 3.625% Senior Notes due 2024 (the 2024 Notes);
(d) US$500 million principal amount of 3.000% Senior Notes due 2025 (the 2025 Notes);
(e) US$500 million principal amount of 4.000% Senior Notes due 2026 (the 2026 Notes);
(f) US$500 million principal amount of 5.875% Senior Notes due 2036 (the 2036 Notes); and
(g) US$500 million principal amount of 5.625% Senior Notes due 2040 (the 2040 Notes).
11. All of the Notes were issued pursuant to, and are subject to the terms of, the indenture between the Filer and U.S. Bank National Association, as successor trustee (the Trustee), dated as of February 27, 2003, as amended or supplemented (the PotashCorp Indenture). Under the PotashCorp Indenture, the Filer was subject to certain contractual disclosure obligations (the Reporting Covenants), however, notwithstanding the foregoing, the PotashCorp Indenture does not contain any obligation or covenant for the Filer to maintain its status as a reporting issuer or the equivalent in any of the Reporting Jurisdictions or to file financial statements or any other continuous disclosure documentation on SEDAR.
12. The Notes are not convertible or exchangeable into PotashCorp Shares and are not listed on any stock exchange.
13. The Notes were issued in the United States pursuant to shelf registration statements in the United States and, to the Filer’s knowledge, were not issued in Canada.
14. The Filer has commercial paper (Commercial Paper) outstanding in the United States. The Commercial Paper was distributed in the United States to predominantly institutional investors and, as of the date hereof, none of the Commercial Paper has been distributed in Canada. No new Commercial Paper is expected to be issued by the Filer subsequent to the date hereof and the outstanding Commercial Paper expires in June 2018. Nutrien adopted a commercial paper program on or around April 12, 2018.
15. The Notes and the Commercial Paper may, without the involvement of the Filer, be traded from time to time in a customary manner for investment grade debt securities in the United States which may constitute a “marketplace” for purposes of National Instrument 21-101 – Marketplace Operation (NI 21-101). In addition, the Notes have been assigned a ticker symbol (the OTC Ticker Symbol) by the U.S. Financial Industry Regulatory Authority (FINRA). Because the PotashCorp Shares no longer trade on the TSX, the Filer constitutes an “OTC Issuer” and an “OTC reporting issuer” under MI 51-105. The assignment of the OTC Ticker Symbols has occurred without the Filer’s involvement. The Filer does not carry on activities that would constitute promotional activities under MI 51-105.
16. On March 12, 2018, Nutrien, the Filer's parent company, announced offers to exchange (the Exchange Offers) and solicitations of consents (the Consent Solicitations) to the holders of the Notes to exchange the Notes for senior unsecured notes to be issued by Nutrien (Nutrien Notes). As part of the Consent Solicitations, Nutrien sought consents to certain amendments to the PotashCorp Indenture, including removal of the Reporting Covenants.
17. On April 9, 2018, Nutrien announced the results of the Exchange Offers and Consent Solicitations. Each Exchange Offer and related Consent Solicitation was successful and Nutrien Notes were issued in exchange for the Notes validly tendered to the Exchange Offers on April 10, 2018. The aggregate principal amount of each series of Notes validly tendered and not withdrawn to the applicable Exchange Offer and related Consent Solicitation were as follows: (i) 2019 Notes – 91.05% (US$455,260,000); (ii) 2020 Notes – 92.18% (US$460,905,000); (iii) 2024 Notes – 94.39% (US$707,940,000); (iv) 2025 Notes – 90.27% ($451,344,000); (v) 2026 Notes – 82.35% (US$411,749,000); (vi) 2036 Notes – 96.23% (US$481,152,000); and (vii) 2040 Notes – 90.41% (US$452,073,000).
18. On April 10, 2018, the Filer and the Trustee entered into Supplemental Indenture No. 1 (the Supplemental Indenture) which amended and supplemented the PotashCorp Indenture to implement the amendments sought by the Filer under the Consent Solicitations, including removal of the Reporting Covenants. Any Notes that were not exchanged for Nutrien Notes under the Exchange Offers continue to be governed by the PotashCorp Indenture as amended and supplemented by the Supplemental Indenture.
19. The distribution of the Nutrien Notes issued upon completion of the Exchange Offers was qualified under a prospectus supplement to the short form base shelf prospectus of Nutrien dated March 12, 2018, in Canada, and under a registration statement, in the United States (collectively, the Prospectus). The Prospectus contained a notice to the holders of the Notes that the Filer would be applying to cease to be a reporting issuer in the Reporting Jurisdictions.
20. The Notes are issued in book-entry form and are represented by global certificates registered in a nominee name of The Depositary Trust Company (DTC), with beneficial interests therein recorded in records maintained by DTC and its participants as financial intermediaries that hold securities on behalf of their clients. In accordance with industry practice and custom, the Filer has engaged D.F. King Ltd. (D.F. King) to ascertain the beneficial ownership of the Notes, including the number of beneficial holders in Canada and their province of location following the completion of the Exchange Offers.
21. The Filer engaged D.F. King as D.F. King is considered a leading provider of bondholder identification services. D.F. King prepared its report to the Filer respecting the holders of the Notes (the Securityholder Report) following a review of the depositary positions identified by DTC and through a geographical analysis report prepared by Broadridge Financial Services Inc. (Broadridge) as to the beneficial holders of the Notes. The Securityholder Report provides proprietary information on the various constituencies holding the Notes as of April 10, 2018. D.F. King has confirmed that its searches and searches through Broadridge have reported on approximately 100% of the geographic ownership of the Notes.
22. Based on the information contained in the Securityholder Report, it is the Filer’s understanding that the Notes are held by investors outside of Canada, except for:
Series of Notes
Principal Amount and Number of Holders in the Reporting Jurisdictions
6.500% Senior Notes due 2019
4.875% Senior Notes due 2020
US$534,000 principal amount held by 27 holders in the Reporting Jurisdictions (two in Alberta holding US$9,000 principal amount, four in British Columbia holding US$24,000 principal amount, one in Manitoba holding US$28,000 principal amount, 17 in Ontario holding US$444,000 principal amount and three in Québec holding US$29,000 principal amount).
3.625% Senior Notes due 2024
US$243,000 principal amount held by one holder in Québec.
3.000% Senior Notes due 2025
US$315,000 principal amount held by two holders in the Reporting Jurisdictions (one in Ontario holding US$15,000 principal amount and one in Québec holding US$300,000 principal amount).
4.000% Senior Notes due 2026
US$300,000 principal amount held by one holder in Québec.
5.875% Senior Notes due 2036
US$2,657,000 principal amount held by seven holders in the Reporting Jurisdictions (all in Ontario).
5.625% Senior Notes due 2040
23. As a result, based on the information contained in the Securityholder Report, it is the Filer’s understanding that following the Exchange Offers the Notes are held beneficially by 38 holders in Canada (25 in Ontario, six in Québec, four in British Columbia, two in Alberta and one in Manitoba) representing approximately 1.23% (Ontario: 0.95%; Québec: 0.26%; British Columbia: 0.008%; Alberta: 0.002%; and Manitoba: 0.008%) of the aggregate principal amount of the outstanding Notes (or US$4,049,000 of the US$329,577,000 aggregate principal amount of the outstanding Notes). Based on the information in the Securityholder Report, the 38 holders of the Notes in Canada represent approximately 1.06% of the total number of holders of the Notes worldwide (approximately 0.70% in Ontario, 0.17% in Québec, 0.11% in British Columbia, 0.06% in Alberta and 0.03% in Manitoba).
24. The Filer is applying for a decision from each of the Jurisdictions that it cease to be a reporting issuer in that Jurisdiction. If each of the Dual Exemptive Relief Decision Makers grants the Order Sought, the Filer will no longer be a reporting issuer in any jurisdiction of Canada.
25. The Filer has no intention to seek a financing by way of an offering of securities.
26. The Filer is not eligible to file under the simplified procedure in section 19 of National Policy 11-206 Process for Cease to be a Reporting Issuer Applications because the outstanding securities of the Filer, including debt securities, are beneficially owned, directly or indirectly, by more than 15 securityholders in Ontario and more than 51 securityholders in total worldwide.
27. The Filer has no securities outstanding other than the PotashCorp Shares, the Notes and the Commercial Paper. The Notes and the Commercial Paper are not convertible or exchangeable into PotashCorp Shares and are not listed on any stock exchange. The Notes and the outstanding Commercial Paper were issued in the United States and, to the Filer’s knowledge, were not issued in Canada.
28. Except as set forth in paragraph 15, no securities of the Filer, including debt securities, are traded in Canada or another country on a marketplace or any other facility for bringing together buyers and sellers of securities, where trading data is publicly reported.
Each of the Dual Exemptive Relief Decision Makers and the OTC Relief Decision Maker is satisfied that the order meets the test set out in the applicable Legislation for the relevant regulator or securities regulatory authority to make the order.
The decision of the Dual Exemptive Relief Decision Makers under the applicable Legislation is that the Reporting Issuer Relief is granted.
The decision of the OTC Relief Decision Maker under the applicable Legislation is that the OTC Relief is granted provided that the Filer does not do either of the following:
(a) carry on activities that would constitute promotional activities under MI 51-105; or
(b) request an OTC Ticker Symbol or request that any class of its securities be quoted or listed for trading on the OTC Markets or any marketplace as defined in NI 21-101 or any other facility for bringing together buyers and sellers of securities where trading data is publicly reported.
Director, Securities Division
Financial and Consumer Affairs Authority of Saskatchewan