IAG.PR.I Closes Soft on Modest Volume

Industrial Alliance Insurance and Financial Services Inc. has announced:

that it has closed its previously announced bought deal public offering of 2,500,000 common shares (the “Common Shares”) at a price of $54.10 per Common Share, for gross proceeds of $135,250,000 and its previously announced concurrent bought deal public offering of 6,000,000 Non-Cumulative 5-Year Rate Reset Class A Preferred Shares Series I (the “Series I Preferred Shares”) at a price of $25.00 per Series I Preferred Share, for gross proceeds of $150,000,000. Both offerings were purchased by a syndicate of underwriters co-led by TD Securities Inc. and National Bank Financial Inc., and which also included RBC Capital Markets, Scotiabank, BMO Capital Markets, CIBC Capital Markets and Industrial Alliance Securities Inc.

The Series I Preferred Shares have been rated “Pfd-2(High)” by DBRS Limited and “A-/P-1(Low)” by Standard & Poor’s and have been listed on the Toronto Stock Exchange under the symbol “IAG.PR.I”.

The Common Shares and the Series I Preferred Shares were issued under two distinct prospectus supplements each dated February 28, 2018 to the Company’s short form base shelf prospectus dated June 22, 2017. Details of each offering are set out in the respective prospectus supplements which are available on the Company’s profile on SEDAR at www.sedar.com.

IAG.PR.I is a FixedReset, 4.80%+275, announced 2018-2-26. It will be tracked by HIMIPref™ and assigned to the FixedResets subindex.

As this issue is not NVCC compliant and it is an insurance issue, it is analyzed as having a Deemed Retraction, effective 2025-1-31 (this date may change in the future).

IAG.PR.I traded 382,460 shares today in a range of 24.84-99 before closing at 24.90-95. Vital statistics are:

IAG.PR.I FixedReset YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2025-01-31
Maturity Price : 25.00
Evaluated at bid price : 24.90
Bid-YTW : 4.89 %

This issue wasn’t all that badly priced on issue date, but now looks rich. IAG.PR.G, the only other FixedReset issued by the company, is currently described as 3.777%+285 and will reset 2022-6-30 – prior to the reset of this new issue. It closed today at 23.53-64, down substantially from the 24.15-22 quote on IAG.PR.I’s announcement date. You’re losing about a point in dividends every year for the four years-odd until reset on a $25.00 par value, so that’s worth a buck; on announcement date this correction meant the issues were reasonably close to being fairly-priced relative to each other, but the large drop in the IAG.PR.G quote means that it is now cheap relative to the new issue. The yields to the Deemed Maturity 2025-1-31 are 5.15% for IAG.PR.G and 4.89% for the new issue, after accounting for resets at the current GOC-5 level.

One Response to “IAG.PR.I Closes Soft on Modest Volume”

  1. […] was issued as IAG.PR.I, a FixedReset, 4.80%+275, that commenced trading 2018-3-7 after being announced 2018-2-26. The ticker changed in 2019. It has been tracked by HIMIPref™ and […]

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