Industrial Alliance Insurance and Financial Services Inc. has announced:
The net proceeds [from an offering of sub-debt] will be added to the Company’s general funds and will be used for general corporate purposes (including, subject to the prior approval of the Autorité des marchés financiers, the redemption of Industrial Alliance’s outstanding 5.90% Non-Cumulative Class A Preferred Shares Series F (the “Series F Preferred Shares”), which Industrial Alliance currently intends to effect on March 31, 2015 (the “Series F Redemption”)).
Subject to the prior approval of the Autorité des marchés financiers, following the closing of the Offering, Industrial Alliance intends to issue a redemption notice to redeem the Series F Preferred Shares. Upon the Series F Redemption, Industrial Alliance will pay to the holders of the Series F Preferred Shares the redemption price of $26 less any taxes required to be withheld or deducted. There are 4,000,000 Series F Preferred Shares outstanding as of today. A formal notice and instructions for the redemption of the Series F Preferred Shares will be sent to all shareholders in accordance with the rights, privileges, restrictions and conditions attached to the Series F Preferred Shares.
Separately from the redemption price, the final quarterly dividend of $0.36875 per Series F Preferred Share will be paid in the usual manner on March 31, 2015 to shareholders of record on February 27, 2015. After the Series F Preferred Shares are redeemed, holders of Series F Preferred Shares will cease to be entitled to distributions of dividends and will not be entitled to exercise any rights as holders other than to receive the redemption price and the final quarterly dividend described above.
On a pro forma basis, after giving effect to the Offering and the Series F Redemption, the Company estimates that, as at December 31, 2014: (i) its debt ratio would increase from 13.2% to 18.1% if only its outstanding debentures are considered “debt”; (ii) its debt ratio would increase from 23.7% to 26.1% if its outstanding debentures and preferred shares are considered “debt”; and (iii) its solvency ratio would increase by 7 percentage points to 216%.
Holders are reminded that the $26 redemption price is a premium of $1.00 over par value and this amount will be considered a Deemed Dividend for tax purposes – that is, the transaction will be considered as a sale at $25.00 and a dividend of $1.00. Thus, some taxable holders will find it advantageous to sell into the market at a few pennies below the redemption value, in order to maximize (minimize) their capital gain (loss) while minimizing dividend income. Please consult your personal tax advisor.
IAG.PR.F has been tracked by HIMIPref™ and is assigned to the DeemedRetractible subindex.
Prefinfo doesn’t reflect this redemption.
It does now! I have put you down to receive a complimentary copy of the July PrefLetter.
Thanks James but I think my yearly subscription ends in November or December.;)
Oops! I have nothing under the eMail you used to comment – if you want to eMail me from your commenting account and tell me your subscribing account, I will add an issue to your subscription.