PrefBlog

Canaccord Financial Inc. has announced:

that it has agreed to issue 4,000,000 Cumulative 5-Year Rate Reset First Preferred Shares, Series C (the “Series C Preferred Shares”) to a syndicate of underwriters led by CIBC, Canaccord Genuity Corp. and RBC Capital Markets for distribution to the public. The Series C Preferred Shares will be issued at a price of $25.00 per share for aggregate gross proceeds of $100 million. Holders of the Series C Preferred Shares will be entitled to receive fixed, cumulative, preferential dividends payable quarterly, if, as and when declared by the board of directors of Canaccord, and yielding 5.75% annually for the initial period ending on June 30, 2017. Thereafter, the dividend rate will be reset every five years at a rate equal to the five year Government of Canada bond yield plus 4.03%.

Holders of Series C Preferred Shares will have the right, at their option, to convert any or all of their shares into an equal number of Cumulative Floating Rate First Preferred Shares, Series D (the “Series D Preferred Shares”), subject to certain conditions, on June 30, 2017 and on June 30th every five years thereafter. Holders of the Series D Preferred Shares will be entitled to receive floating rate, cumulative, preferential dividends payable quarterly, if, as and when declared by the board of directors of Canaccord, at a rate equal to the three-month Government of Canada Treasury Bill yield plus 4.03%.

Canaccord has also granted the underwriters an option to purchase up to an additional 600,000 Series C Preferred Shares, on the same terms and conditions as the offering, exercisable in whole or in part, for a period of 30 days from the closing date of the offering. If this option is exercised in full, the total gross proceeds to Canaccord will be $115 million.

The net proceeds of the offering will be used to reduce outstanding borrowings under the $150 million senior secured credit facility (the “Acquisition Credit Facility”) entered into by the Company, as borrower, and provided by Canadian Imperial Bank of Commerce, as lender. The Acquisition Credit Facility was entered in order to fund a portion of the cash consideration for the Company’s previously announced acquisition of Collins Stewart Hawkpoint plc, which closed on March 21, 2012. The offering is expected to close on or about April 10, 2012, subject to certain conditions, including Toronto Stock Exchange approval, as well as other conditions set forth in an underwriting agreement to be entered into between Canaccord and the underwriters.

The Series C Preferred Shares will be offered for sale to the public in each of the provinces and territories of Canada by way of a short form prospectus to be filed with Canadian securities regulatory authorities in all provinces of Canada.

This entry was posted on Thursday, March 22nd, 2012 at 12:11 pm and is filed under New Issues. 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.