Underwriters Exercise Full Over-Allotment Option on TransCanada Common Share Offering

Dividend Reinvestment Plan Discount increased to three per cent

CALGARY, ALBERTA--(Marketwire - Dec. 5, 2008) - TransCanada Corporation (TSX:TRP) (NYSE:TRP) (TransCanada) today announced that the syndicate of underwriters led by RBC Capital Markets, BMO Capital Markets and TD Securities Inc. of its recent Common Share offering have exercised their full over-allotment option to purchase an additional 4,575,000 Common Shares at a price of $33.00 per Common Share.

The gross proceeds from the over-allotment option total approximately $151 million. Gross proceeds from the common share offering and the over-allotment option total approximately $1.157 billion. The net proceeds of the offering will be used by TransCanada to partially fund capital projects of the Corporation including the Keystone Pipeline System, for general corporate purposes and to repay short-term debt.

TransCanada also announced today that the Board of Directors has approved an increase in the discount on the issuance of common shares from treasury under TransCanada's Dividend Reinvestment Plan from two to three per cent for the common share dividend payable on January 30, 2009 to the shareholders of record at the close of business on December 31, 2008. Dividends on TransCanada Pipelines Limited outstanding preferred shares are also eligible to participate in the Dividend Reinvestment Plan.

With more than 50 years' experience, TransCanada is a leader in the responsible development and reliable operation of North American energy infrastructure including natural gas pipelines, power generation, gas storage facilities, and projects related to oil pipelines and LNG facilities. TransCanada's network of wholly owned pipelines extends more than 59,000 kilometres (36,500 miles), tapping into virtually all major gas supply basins in North America. TransCanada is one of the continent's largest providers of gas storage and related services with approximately 370 billion cubic feet of storage capacity. A growing independent power producer, TransCanada owns, or has interests in, over 10,900 megawatts of power generation in Canada and the United States. TransCanada's common shares trade on the Toronto and New York stock exchanges under the symbol TRP.

FORWARD LOOKING INFORMATION

This news release may contain certain information that is forward looking and is subject to important risks and uncertainties. The words "anticipate", "expect", "may", "should", "estimate", "project", "outlook", "forecast" or other similar words are used to identify such forward looking information. All forward-looking statements reflect TransCanada's beliefs and assumptions based on information available at the time the statements were made. Actual results or events may differ from those predicted in these forward-looking statements. Factors which could cause actual results or events to differ materially from current expectations include, among other things, the ability of TransCanada to successfully implement its strategic initiatives and whether such strategic initiatives will yield the expected benefits, the operating performance of the Company's pipeline and energy assets, the availability and price of energy commodities, regulatory processes and decisions, changes in environmental and other laws and regulations, competitive factors in the pipeline and energy industry sectors, construction and completion of capital projects, labour, equipment and material costs, access to capital markets, interest and currency exchange rates, technological developments and the current economic conditions in North America. By its nature, such forward-looking information is subject to various risks and uncertainties, which could cause TransCanada's actual results and experience to differ materially from the anticipated results or expectations expressed. Additional information on these and other factors is available in the reports filed by TransCanada with Canadian securities regulators and with the U.S. Securities and Exchange Commission. 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 or otherwise, and to not use future-oriented information or financial outlooks for anything other than their intended purpose. TransCanada undertakes no obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by law.
 

TransCanada
Media Inquiries
Cecily Dobson
(403) 920-7859 or (800) 608-7859
or
Investor & Analyst Inquiries
David Moneta/Myles Dougan/Terry Hook
(403) 920-7911 or (800) 361-6522
Website: www.transcanada.com