PrefBlog

Newgrowth Corp. has announced:

that the final condition required to extend the term of the Company for an additional five years to June 26, 2014 has been met. Holders of Class A Capital Shares previously approved the extension of the term of the Company subject to the condition that a minimum of 1,340,000 Class A Capital Shares remain outstanding after giving effect to the special retraction right (the “Special Retraction Right”).

Under the Special Retraction Right, 88,897 Class A Capital Shares have been tendered to the Company for retraction on June 26, 2009. Holders of these shares will receive a retraction price equal to the amount, if any, by which the Unit Value exceeds $18.25. Holders of the remaining 2,238,510 Class A Capital Shares will continue to enjoy the benefits of a leveraged participation in the capital appreciation of the Company’s portfolio of publicly listed common shares of selected Canadian chartered banks, telecommunication, pipeline and utility companies.

The Class B Preferred Shares will be redeemed by the Company on June 26, 2009 in accordance their terms at a price per share equal to the lesser of $18.25 and Unit Value. In order to maintain the leveraged “split share” structure of the Company, the Company will offer a new series of Class B Preferred Shares to be called the Series 2 Preferred Shares pursuant to a preliminary prospectus dated May 22, 2009.

The preliminary prospectus for the new issue does not state a dividend rate. Given that the capital units (NEW.A) have a market value of about $44-million and that coverage of at least 2:1 may be reasonably expected, it is unlikely that the new issue will be tracked by HIMIPref™.

The refunding proposal has been previously discussed on PrefBlog. NEW.PR.B is not tracked by HIMIPref™.

This entry was posted on Monday, June 1st, 2009 at 6:38 pm and is filed under Issue Comments. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.