Blue Water Bridge Authority Announces Bondholder Meeting for Its Series 2010-A Bonds and 6.41% Revenue Bonds, Series 2002-1 due 2027 (CUSIP 096080AA4)

TORONTO, Jan. 13, 2015 /CNW/ - The Blue Water Bridge Authority (operating under the name of Blue Water Bridge Canada) ("BWB" or the "Company"), announced today a proposed meeting of registered holders (each, a "Holder" or "Bondholder" and, collectively, the "Holders" or "Bondholders") of its "Outstanding" 6.41% Revenue Bonds, Series 2002-1 due 2027 (CUSIP 096080AA4) (the "CDS Bonds") and Series 2010-A ("Pledge Bonds", together with the CDS Bonds, the "Bonds") issued pursuant to the trust indenture governing the Bonds (the "Indenture") on the terms and subject to the conditions set forth in the circular (as it may be amended or supplemented from time to time, the "Circular") and in the notice of Bondholder Meeting (as defined below) (the "Meeting Notice") and the proxy forms (the "Proxy Forms", together with the Circular and Meeting Notice,  the "Meeting Documents") scheduled to take place at 10:00 a.m. (Toronto time) on January 26, 2015, at Suite 5300, Toronto-Dominion Bank Tower, 66 Wellington Street West, Toronto, Ontario, M5K 1E6 (as may be adjourned or postponed, the "Bondholder Meeting"), at which meeting: (a) holders of Bonds will be asked to consider and, if deemed appropriate, pass: (i) an extraordinary resolution (the "Extraordinary Resolution") authorizing and approving the Proposed Extraordinary Amendments; and (ii) a special bondholders' resolution (the "Special Resolution") authorizing and approving the Proposed Special Amendments; (b) holders of CDS Bonds will be asked to consider and, if deemed appropriate, pass an extraordinary resolution (the "CDS Resolution", together with the Extraordinary Resolution and the Special Resolution, the "Resolutions") authorizing and approving the Proposed CDS Amendments; and (c) holders of Bonds will be asked to transact such further or other business as may properly come before the Bondholder Meeting. Capitalized terms used but not otherwise defined in this press release have the respective meanings in the Circular.

Certain arm's length holders of CDS Bonds (the "Supporting Holders of CDS Bonds") who have represented that they own, exercise voting and investment authority over, or otherwise provide investment advice in respect of, collectively an aggregate principal amount of C$44,747,206.29 of Outstanding CDS Bonds representing approximately 59% of the Outstanding CDS Bonds have advised BWB that they are supportive and they expect or intend to vote or recommend their clients vote in favour of each of the Resolutions. In addition, the sole arm's length holder of Pledge Bonds (the "Supporting Holder of Pledge Bonds", together with the Supporting Holders of CDS Bonds, the "Supporting Bondholders") has advised BWB that it is supportive and intends to vote in favour of each of the Extraordinary Resolution and the Special Resolution. However, the Supporting Bondholders have not entered into a binding agreement with BWB to this effect. Based on the foregoing, BWB understands that the Supporting Bondholders collectively own, exercise voting and investment authority over, or otherwise provide investment advice in respect of, an aggregate principal amount of C$58,434,005.49 of Outstanding Bonds entitling them to (a) 58,434 votes out of a total of 89,317 votes (assuming all Bonds are voted) on each of the Extraordinary Resolution and the Special Resolution, representing approximately 65% of the total votes on such resolutions (assuming all Bonds are voted) ; and (b) 44,747 votes out of a total of 75,630 votes (assuming all CDS Bonds are voted) on the CDS Resolution, representing approximately 59% of the total votes on such resolution (assuming all CDS Bonds are voted).

In order to vote either for or against the Resolutions at the Bondholder Meeting, a holder of Bonds must validly deliver (and not validly revoke) a Proxy Form prior to the Proxy Cut-Off Date. The term "Proxy Cut-Off Date" means 10:00 a.m., Toronto time, on January 23, 2015, or, if the Bondholder Meeting is adjourned or postponed, 48 hours (excluding Saturdays, Sundays and holidays) before any adjourned or postponed Bondholder Meeting.

Record Date

The record date has been set as January 12, 2015 at the close of business, Toronto time (the "Record Date") to determine which holders of the Bonds may receive notice of and be eligible to vote at the Bondholder Meeting. Only Bondholders whose names appear on the register of bondholders maintained by or on behalf of BWB at the close of business, Toronto time, on the Record Date may receive notice of and be eligible to vote at the Bondholder Meeting. Accordingly, Bondholders who acquire the Bonds after the Record Date and intend on voting in respect of the Resolutions must ensure they acquire the voting rights associated with such Bonds in order to be able to deliver a Proxy Form prior to the Proxy Cut-Off Date.

Background

The Government of Canada has announced its intention to reorganize certain Crown corporations responsible for international bridges in Ontario for improved oversight and consistent application of corporate policies and procedures across, amongst other things, operations, reporting, service levels and security protocols. Accordingly, certain Crown corporations are expected to amalgamate to establish a single Crown corporation.

In particular, the Government of Canada has announced its intention to amalgamate The Federal Bridge Corporation Limited ("FBCL") with, among other companies, BWB (the "Amalgamation"). BWB currently is a non-agent Crown corporation, created by the Blue Water Bridge Authority Act. FBCL is an agent Crown corporation that was incorporated under the Canada Business Corporations Act ("CBCA"). Under the CBCA, both parties to an amalgamation must be governed by that statute prior to amalgamation. As FBCL is currently governed by the CBCA, BWB is required to continue under the CBCA in order to effect the Amalgamation (the "Continuance").

BWB and FBCL jointly intend to submit articles of amalgamation for registration with Industry Canada to be registered with an effective date on or about February 1, 2015. The amalgamated entity will continue under the name The Federal Bridge Corporation Limited ("Amalco"). Amalco will own, operate and control the Canadian portions of the certain international bridges, including the Blue Water Bridge and the bridges currently owned, operated and controlled by FBCL.

Pursuant to the Economic Action Plan 2013 Act, No 2, as amended by the Economic Action Plan 2014 Act, No 2, Amalco will be an agent Crown corporation. As the Bonds shall constitute direct, unsecured, and unconditional obligations of Amalco, by operation of law, the Bonds will constitute direct, unsecured, and unconditional obligations of Her Majesty in right of Canada who becomes the principal of Amalco on the Amalgamation. 

Payment of principal of and interest on the Bonds by Her Majesty in right of Canada in an event of default are subject to Parliamentary appropriation. An appropriation is the authority to pay money out of the Consolidated Revenue Fund (the "CRF"). The CRF is the aggregate of all public moneys, such as tax revenues, which are on deposit at the credit of the Receiver General for Canada, the public officer who receives or collects public moneys for and on behalf of Canada. No payments shall be made out of the CRF without the authority of Parliament. However, the Crown Liability and Proceedings Act assures the payment of judgement debts from the CRF by the Crown by providing that upon receipt of a certificate of judgment against the Crown, the Minister of Finance of Canada is required to authorize the payment out of the Consolidated Revenue Fund of any money awarded by the judgment to any person against the Crown. A certificate of judgment is a document issued by a court having jurisdiction with respect to claims against the Crown that evidences a judgement rendered against the Crown which has not been appealed or affirmed or varied on appeal.

Summary of the Proposed Amendments

The primary effect of the Proposed Extraordinary Amendments will be to implement certain consequential amendments with respect to the Continuance.

The primary effect of the Proposed Special Amendments is to authorize the Trustee to take such steps and do such acts to execute and deliver the Amended and Restated Trust Indenture, to effect, among other things: (a) the release of the security held by the Bondholders and to cancel Pledge Bonds, each of which is required to effect the Amalgamation; and (b) the elimination of substantially all of the restrictive covenants in the Indenture.  In addition, certain provisions will be added to the Indenture, including: (i) a "Repurchase on Change of Control Triggering Event" provision, pursuant to which Amalco will be required to make an offer to the Bondholders at a prescribed price to repurchase all or, at the option of the holder, any part of each holder's Bonds upon the occurrence of a "Change of Control"; and (ii) a "Credit Rating" provision, pursuant to which Amalco is required to maintain at all times a rating on the Bonds from one or more "Rating Agencies".

The primary effect of the Proposed CDS Amendments will be to effect certain consequential amendments to the First Supplemental Indenture resulting from the Proposed Special Amendments (if authorized and approved).

Retention of Counsel by the Trustee

Pursuant to the provisions of the Indenture, the Trustee, on behalf of all of the Bondholders, retained a nationally recognized law firm ("Bondholder's Counsel") to provide advisory services to the Bondholders in connection with the Bondholder Meeting. While BWB is responsible for the legal fees, Bondholder's Counsel is an independent legal counsel representing the interests of the Bondholders.

Effect of the Proposed Amendments on Non-Voting Holders

If the Proposed Amendments become operative, each Bondholder irrespective of whether such person submitted a proxy or voted for or against the Bondholder Resolution will be bound by the Proposed Amendments.

Requisite Approval

Requisite approval of the Bondholders for the Proposed Extraordinary Amendments may be obtained if the Extraordinary Resolution is passed by the holders of "Outstanding" Bonds representing not less than 66⅔% of the votes cast in respect of such resolution at the Bondholder Meeting.

Requisite approval of the Bondholders for the Proposed Special Amendments may be obtained if the Special Resolution is passed by the holders of "Outstanding" Bonds representing not less than 95% of the votes cast in respect of such resolution at the Bondholder Meeting.

Requisite approval of the holders of CDS Bonds for the Proposed CDS Amendments may be obtained if the CDS Resolution is passed by the holders of "Outstanding" CDS Bonds representing not less than 66⅔% of the votes cast in respect of such resolution at the Bondholder Meeting.

D.F. King Canada is acting as the Information Agent and CST Trust Company is acting as the Tabulation Agent for the Bondholder Meeting. Any questions or requests for additional copies of the Circular, Proxy Form or any other documents may be directed to D.F. King Canada as Information Agent.

IMPORTANT NOTICE

Holders are urged to evaluate carefully all information in the Meeting Documents, consult their own investment and tax advisors and make their own decisions about whether or how to vote at the Bondholder Meeting and deliver Proxy Forms. The statements made in this news release are made as of the date hereof, and the issuance of this news release or delivery of the Meeting Documents and the accompanying materials shall not, under any circumstances, create any implication that the information contained herein is correct after the date hereof.

The solicitation does not constitute an offer to buy, or a solicitation of an offer to sell, any securities, or the solicitation of a proxy, by any person in any jurisdiction in which such an offer or solicitation is not authorized or in which the person making such an offer or solicitation is not qualified to do so or to any person to whom it is unlawful to make such an offer or solicitation. The acceptance of Proxy Forms shall not, under any circumstances, create any implication that there has been no change in our or our affiliates' affairs since the date hereof, or that the information included herein is correct as of any time subsequent to the date hereof.

NONE OF BWB, THE INFORMATION AGENT, THE TABULATION AGENT OR THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES OR REPRESENTATIVES MAKES ANY RECOMMENDATION TO ANY HOLDER WHETHER OR HOW TO VOTE AT THE BONDHOLDER MEETING AND/OR DELIVER OR REFRAIN FROM DELIVERING ANY PROXY FORMS. NONE OF BWB, THE INFORMATION AGENT, THE TABULATION AGENT OR THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES HAS AUTHORIZED ANY PERSON TO MAKE ANY SUCH RECOMMENDATION.

Cautionary Statement on Forward-Looking Statements

This press release may contain statements which constitute "forward-looking information" as defined under Canadian securities legislation, about BWB and BWB's intentions regarding, including, without limitation, the Continuance and the Amalgamation. Such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and actual results may differ from those in the forward-looking statements as a result of various factors. Such statements include, but are not limited to, any statements about the Continuance and the Amalgamation and may be (but are not necessarily) identified by the use of phrases such as "may", "should", "would", "will", "could", "expect", "intend", "plan", "estimate", "anticipate", "believe", "future", "proposed" or "continue" or the negative thereof or similar variations. These forward-looking statements speak only as of the date of this press release. Bondholders are cautioned not to put undue reliance on such forward-looking statements which are not a guarantee of performance and are subject to a number of uncertainties, assumptions and other factors, many of which are outside the control of BWB, which could cause actual results to differ materially from those expressed or implied by such forward-looking statements. Important factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements include, among other things, BWB's ability to satisfy the conditions to the implementation of the Proposed Amendments, including that the Proposed Amendments may not be approved by the Bondholders on the terms expected or on the anticipated schedule or at all, that the Supporting Bondholders have not entered into binding agreements with BWB, that the Continuance may not be completed on the terms expected or on the anticipated schedule or at all, that the Amalgamation may not be completed on the terms expected or on the anticipated schedule or at all, changes in the operation of BWB, general economic and market factors (including changes in global, national or regional financial, credit, currency or security markets), changes or developments in global, national or regional political conditions (including any act of terrorism or war), changes in government laws or regulations (including tax laws) and changes in regulatory accounting requirements and other risk factors identified herein under the heading "Risk Factors". Readers of this press release are cautioned not to place undue reliance on forward-looking statements, which reflect the analysis of the management of BWB only as of the date of this press release. BWB is under no obligation, and expressly disclaims any intention or obligation, to update or revise any forward-looking statements, whether as a result of new information, future event or otherwise, except as required by applicable law.

SOURCE Blue Water Bridge Canada

Tabulation Agent: CST Trust Company, 320 Bay Street, Toronto, ON M5H 4A6, Toll Free: 1-800-387-0825, Direct: [phone], Facsimile: (416)-368-2502; Information Agent: D.F. King Canada, Toll Free in North America: 1(800) 921-8867, Outside North America: 1-201-806-7301, Email: [email protected]