PrefBlog

Industrial Alliance Insurance and Financial Services Inc. has announced that it:

has today entered into an agreement with a syndicate of underwriters co-led by Scotiabank and RBC Capital Markets under which the underwriters have agreed to buy, on a bought deal basis, 6,000,000 Non-Cumulative 5-Year Rate Reset Class A Preferred Shares Series G (the “Series G Preferred Shares”) from Industrial Alliance for sale to the public at a price of $25.00 per Series G Preferred Share, representing aggregate gross proceeds of $150 million.

This share offering is expected to close on or about June 1, 2012, subject to certain conditions, including Toronto Stock Exchange and other customary regulatory approvals. The net proceeds of this offering will be used for general corporate purposes and will be added to Industrial Alliance’s capital base. Holders of the Series G Preferred Shares will be entitled to receive a non-cumulative quarterly fixed dividend of $0.26875 per Series G Preferred Share, yielding 4.30% per annum, as and when declared by the Board of Directors of Industrial Alliance, for the initial period up to but excluding June 30, 2017. On June 30, 2017 and on June 30 every five years thereafter, the dividend rate will reset to be equal to the then current five-year Government of Canada bond yield plus 2.85%. Holders of the Series G Preferred Shares will have the right, at their option, to convert their shares into Non-Cumulative Floating Rate Class A Preferred Shares Series H (the “Series H Preferred Shares”), subject to certain conditions and the Company’s right to redeem the Series G Preferred Shares as described below, on June 30, 2017 and on June 30 every five years thereafter.

Holders of the Series H Preferred Shares will be entitled to receive a quarterly non-cumulative floating rate dividend, as and when declared by the Board of Directors of Industrial Alliance, equal to the 90-day Government of Canada Treasury Bill Rate plus 2.85%. Holders of the Series H Preferred Shares will have the right, at their option, to convert their shares into Series G Preferred Shares, subject to certain conditions and the Company’s right to redeem the Series H Preferred Shares as described below, on June 30, 2022 and on June 30 every five years thereafter. The Series G Preferred Shares will not be redeemable by Industrial Alliance prior to June 30, 2017. On June 30, 2017 and on June 30 every five years thereafter, Industrial Alliance may, subject to certain conditions (including regulatory approval), redeem all or any part of the Series G Preferred Shares at a cash redemption price per share of $25.00 together with all declared and unpaid dividends. The Company may redeem all or any part of the Series H Preferred Shares at a cash redemption price per share of $25.00 together with all declared and unpaid dividends in the case of redemptions on June 30, 2022 and on June 30 every five years thereafter or $25.50 together with all declared and unpaid dividends in the case of redemptions on any other date after June 30, 2017. On a pro forma basis, after giving effect to this Series G Preferred Shares issue, the Company estimates that, as at March 31, 2012, its solvency ratio would increase by 9 percentage points, from 186% to 195%. The offering will be made pursuant to a prospectus supplement to Industrial Alliance’s short form base shelf prospectus dated April 29, 2011. Complete details of the offering will be set out in the prospectus supplement, which will be filed with the Canadian securities regulatory authorities and will be available on SEDAR at www.sedar.com.

This entry was posted on Thursday, May 24th, 2012 at 12:07 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.