New Issue: FFH FixedReset 5.00%+256

Fairfax Financial Holdings has announced:

that it will issue in Canada 8 million Preferred Shares, Series G at a price of $25.00 per share, for aggregate gross proceeds of $200 million, on a bought deal basis to a syndicate of Canadian underwriters.

Holders of the Preferred Shares, Series G will be entitled to receive a cumulative quarterly fixed dividend yielding 5.0% annually for the initial five year period ending September 30, 2015. Thereafter, the dividend rate will be reset every five years at a rate equal to the then current 5-year Government of Canada bond yield plus 2.56%.

Holders of Preferred Shares, Series G will have the right, at their option, to convert their shares into Preferred Shares, Series H, subject to certain conditions, on September 30, 2015, and on September 30 every five years thereafter. Holders of the Preferred Shares, Series H will be entitled to receive cumulative quarterly floating dividends at a rate equal to the then current three-month Government of Canada Treasury Bill yield plus 2.56%.

Fairfax has granted the underwriters an option, exercisable in whole or in part at any time up to 9:00 am on the date that is two business days prior to the closing date, to purchase an additional 2 million Preferred Shares, Series G at the same offering price for additional gross proceeds of $50 million.

Fairfax intends to use the net proceeds of the offering to augment its cash position, to increase short term investments and marketable securities held at the holding company level, to retire outstanding debt and other corporate obligations from time to time, and for general corporate purposes. The offering is expected to close on or about July 28, 2010.

One Response to “New Issue: FFH FixedReset 5.00%+256”

  1. […] FFH.PR.G is a FixedReset, 5.00%+256, announced July 20. […]

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