Industrial Alliance Insurance and Financial Services Inc. has announced (on January 2):
that the plan of arrangement approved at the annual and special meeting of its common shareholders held on May 10, 2018 has been completed. Effective January 1, 2019, IAIFS is a subsidiary all of whose common shares are held by iA Financial Corporation Inc. (“iA Financial Corporation”).
Under the plan of arrangement, all the common shares of IAIFS outstanding at January 1, 2019 have been exchanged for newly issued common shares of iA Financial Corporation, the new holding company, on a one-for-one basis. The holders of IAIFS’s common shares were not required to take any action for the exchange of their shares. Issued and outstanding series of preferred shares and debentures will remain issued by IAIFS and have been guaranteed by iA Financial Corporation in accordance with the terms of the arrangement.
At the open of markets on January 4, 2019, the common shares of iA Financial Corporation will be listed and begin trading on the Toronto Stock Exchange (TSX) under the existing trading symbol of IAIFS (TSX:IAG). The publicly issued and outstanding Class A Preferred Shares, Series B, G and I, of IAIFS will continue to trade on the TSX but under the new symbols “IAF.PR.B”, “IAF.PR.G” and “IAF.PR.I”.
iA Financial Corporation is governed by the Business Corporations Act (Quebec) and is not regulated under the Act respecting insurance (Quebec). However iA Financial Corporation will maintain the ability to supply capital, if it considers it necessary, to IAIFS so that the latter meets the adequacy of capital requirements under the Act respecting insurance (Quebec). Pursuant to an undertaking, iA Financial Corporation will disclose its capital position on a quarterly basis. A copy of the undertaking (to which the Autorité des marchés financiers is an intervening party) will be filed under the SEDAR profiles of both iA Financial Corporation and IAISF at www.SEDAR.com.
As of January 1, 2019, the members of the Boards of Directors of IAIFS and iA Financial Corporation are the same, and the normal course issuer bid program of IAIFS has been transferred to iA Financial Corporation, subject to compliance with regulatory limits and requirements.
A full description of the plan of arrangement was provided in the Management Proxy Circular of IAIFS dated March 23, 2018 that was sent to common shareholders and filed on SEDAR at www.sedar.com. The final order approving the arrangement was issued by the Superior Court of Québec on May 17, 2018. The arrangement was authorized by the Québec Minister of Finance as required under the Act respecting insurance (Quebec) on December 12, 2018.
So, to summarize:
| Old Ticker | New Ticker |
| IAG.PR.A | IAF.PR.B |
| IAG.PR.G | IAF.PR.G |
| IAG.PR.I | IAF.PR.I |
Issued and outstanding series of preferred shares and debentures will remain issued by IAIFS and have been guaranteed by iA Financial Corporation in accordance with the terms of the arrangement.
Why did they do this reorg? There has to be some underlying reason, but low level investors like us would never know. Would this have any impact on the creditworthiness of the preferreds? Did anyone at ratings agencies bless this reorg?
Why did they do this reorg?
Have you read the “the Management Proxy Circular of IAIFS dated March 23, 2018 that was sent to common shareholders and filed on SEDAR at http://www.sedar.com.”?
I just spent some time reading that release (140 pages). But there’s no intent mentioned just the mechanics of setting up a Holding company. Perhaps it’s all there, but I couldn’t find it.
The question is- why does Holdco own all the common equity while opco own all the debentures and preferreds?
Is that a typical arrangement with other Lifecos?
Assuming hypothetically, that the litigation against IAG and Manulife succeeds, then wouldn’t the Holdco be shielded from litigation? And risk exposed to the Opco, as is in a typical structure?
Thanks in advance!
Here’s a more direct answer from the horse’s mouth:
https://ia.ca/newsroom/2018/february/ia-financial-group-announces-plan-to-create-a-holding-company
“We believe it would be beneficial to adapt our legal structure to the current reality of our organization,” explains President and CEO Yvon Charest. “A holding company would give us more financial flexibility to execute our growth strategy and better reflect the diversification of our operations.”
As a pan-Canadian financial services company, iA Financial Group competes with major players that currently benefit from this type of legal structure.
“It would clearly be to our advantage to have the same flexibility as our key competitors,” says Chief Operating Officer Denis Ricard. “We are committed to continued growth and that means becoming an increasingly important player in both the Canadian and U.S. markets.”
I hold the IAF.PR.G shares in a position acquired with Virtual Brokers in Dec. On my account balance it shows as a CUSIP position with zero value, and the CSR there tells me I cannot trade the position till the reorg is complete, probably a couple more weeks.
Not sure if this is a load of horse-feathers as I see 1900 traded so far today.
the CSR there tells me I cannot trade the position till the reorg is complete
Well, it sounds like horsefeathers to me!
Don’t take that as definitive as I am by no means an expert on the current rules regarding reorganizations, but if you do have a desire to trade it, I suggest to contact, in order:
i) Virtual Brokers’ compliance department
ii) IIROC
iii) OSC
in order to get the straight dope.
I should point out that the explanation you were given makes no sense.
The reorganization has been completed. It’s done. At this point, I am completely confident that Virtual Brokers has a position with CDS with the new CUSIP and no position at all with the old CUSIP. It’s all electronic – bang, bang, done.
Positions are currently being reported correctly at RBC Direct Investing, BMO Investorline, CIBC Investors’ Edge, and Interactive Brokers.
Squeaky wheel gets the grease. I bypassed Customer “Service” and went to the Trading Desk, and between that and the Back Office I got the position in the account balance updated overnight, so I have an order entered now.
It’s not the first time I’ve been snow jobbed by V.B. Thank you for your input on this, James.
In the table, shouldn’t the new ticker for IAG.PR.I be IAF.PR.I?
In the table, shouldn’t the new ticker for IAG.PR.I be IAF.PR.I?
You’re quite right, it should. I have made the change.
[…] arose via ticker change from IAG.PR.G in January 2019. IAG.PR.G was issued as a FixedReset, 4.30%+285, that commenced trading 2012-6-1 […]
[…] 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 is assigned to the FixedResets (Discount) […]