Atlantic Power Corp (TSX: ATP, NYSE: AT), which priced new equity and debt offerings this week, is a buy up to USD13, not USD15, as incorrectly stated in the Oct. 15, 2010, Maple Leaf Memo Roundup. We regret the error and apologize for any inconvenience.

The announcement of dual efforts to raise capital–an offering of 5,245,000 shares of common stock at a price of USSD13.35, along with a 30-day overallotment option of 784,000 additional shares, in addition to CD70 million in convertible debt–triggered some volatility in Atlantic’s share price.

Predictably, the equity offering triggered fears of potential dilution and even caused some to worry about the safety of the distribution. The reality is this is the lowest-cost capital Atlantic has ever been able to issue, particularly considering the likely upsizing of the equity portion to USD75.6 million from an initial level of USD65.7 million. The convertible debt, for example, is priced to yield just 5.6 percent, maturing in roughly 7 years. And conversion value won’t kick in unless Atlantic shares hit USD18.03 per share.

Low-cost capital means enhanced ability to grow with acquisitions and asset construction, and Atlantic has no shortage of either potential opportunities. The offering demonstrates the company’s new power to raise capital as a New York Stock Exchange-listed stock as well.

I’m still a buyer of Atlantic Power Corp, but only on dips to USD13, at least until we see more acquisitions and/or performance numbers. But this one is going very well–an equity offering that will spur long-term growth is no reason to cash out.