QUANTUMONLINE.COM SECURITY DESCRIPTION: UGI Corporation Equity Units stated amount $100 per unit, initially consisting of Corporate Units which include a stock purchase contract and a 1/10th, undivided beneficial ownership in one share of UGI Corp. 0.125% Series A Cumulative Perpetual Convertible Preferred Stock with a principal amount of $1000. The stock purchase contract requires the holder to purchase for $100 a variable number of shares of UGI Corp. (NYSE:UGI) common stock no later than 06/01/2024 and pays a contract adjustment rate of 7.125% per annum. The stock purchase settlement rate will be 2.2826 shares per unit if the then current market price is equal to or lesser than $43.81. For market prices above $43.81 the settlement rate will be $100.00 divided by the market value. Prior to the IPO of this security, the last reported sale price of the common stock on 05/17/21 was $43.81 per share. The stock purchase contract may be settled any time at the holder’s option and the company will deliver 85% of the shares that would be deliverable for each purchase contract (see prospectus for more details).
0.125% Series A Cumulative Perpetual Convertible Preferred Stock liquidation preference $1000 per share redeemable at the issuer's option on or after 09/03/2024 at $1000 per share plus accrued and unpaid dividends, and with no stated maturity. The conversion rate will initially be 19.0215 shares UGI Corp. (NYSE:UGI) common stock per share of convertible preferred stock, equivalent to an initial conversion price of approximately $52.57 per share of common stock, and may not be converted at the holder's option until 06/01/2024. UGI Corp. 0.125% Series A Cumulative Perpetual Convertible Preferred Stock is subject to reset and remarketing in the optional remarketing window of 03/01/2024 to 05/13/2024 (see prospectus for more details). The UGI Corp. 0.125% Series A Cumulative Perpetual Convertible Preferred Stock are pledged as collateral to secure the holder's obligations under the stock purchase contract.
Units pay quarterly distributions of 7.25% ($7.25) per annum on 3/1, 6/1, 9/1 & 12/1 to holders of record on the record date which is one business day prior to the payment date while the securities remain in book-entry form (NOTE: the ex-dividend date is one business day prior to the record date). Distributions paid by the Purchase contract are interest and as such are NOT eligible for the preferential 15% to 20% tax rate on dividends and are also NOT eligible for the dividend received deduction for corporate holders. Dividends paid by the preferred security are eligible for the preferential income tax rate of 15% to a maximum of 20% depending on the holder's tax bracket (and under IRS specified holding restrictions) and are also eligible for the dividends received deduction for corporate holders (see page S-142 of the prospectus for further information).
If a Fundamental Change occurs on or prior to 06/01/2024 the underlying securities may be converted into common stock at the fundamental change conversion rate plus a fundamental change dividend make-whole amount (see prospectus for further information).
The holder has the right at any time (subject to black out periods) to convert the Corporate Units to Treasury Units by the substitution of a specified zero-coupon U.S. Treasury security for the units and to later recreate Corporate Units.
The units are unsecured subordinated debt and rank equally with the company's other unsecured subordinated notes. See the IPO prospectus for extensive additional information on the equity units and their mandatory conversion provisions by clicking on the ‘Link to IPO Prospectus’ provided below.
