Power Financial Corporation has announced:
that it has agreed to issue 7,000,000 Non-Cumulative 5-Year Rate Reset First Preferred Shares, Series T (the “Series T Shares”) on a bought deal basis, for gross proceeds of $175 million. The Series T Shares will be priced at $25.00 per share. Closing is expected to occur on or about December 11, 2013. The issue will be underwritten by a syndicate of underwriters led by BMO Capital Markets, RBC Capital Markets and Scotiabank.
Power Financial has also granted the underwriters an option to purchase an additional 1,000,000 Series T Shares at the same offering price. Should the underwriters’ option be exercised fully, the total gross proceeds of the Series T Share offering will be $200 million.
Dividends on the Series T Shares, if, as and when declared by the Board of Directors of the Corporation, will yield 4.20% per annum, payable quarterly for an initial period ending January 31, 2019. On January 31, 2019 and on January 31 every five years thereafter, the dividend rate will reset to be equal to the then current five-year Government of Canada bond yield plus 2.37%. Holders of the Series T Shares will have the right to convert their shares into Non-Cumulative Floating Rate First Preferred Shares, Series U of the Corporation (the “Series U Shares”), subject to certain conditions and the Corporation’s right to redeem the Series T Shares on January 31, 2019 and on January 31 every five years thereafter. Holders of the Series U Shares will be entitled to receive a quarterly floating rate dividend, if, as and when declared by the Board of Directors of the Corporation, equal to the three-month Government of Canada Treasury Bill yield plus 2.37%.
The net proceeds from the issue will be used to supplement the Corporation’s financial resources and for general corporate purposes. The Corporation intends to redeem all of its $175 million First Preferred Shares, Series M on January 31, 2014 upon completion of the Series T offering.
Update, 2013-12-11: Trades as PWF.PR.T