PrefBlog

The Empire Life Insurance Company has announced:

that it has completed its Canadian public offering of 5.2 million Non-Cumulative Rate Reset Preferred Shares, Series 1 (the “Series 1 Preferred Shares”) at a price of $25 per share to raise gross proceeds of $130 million.

The offering was underwritten on a bought deal basis by a syndicate of underwriters co-led by Scotia Capital Inc., CIBC World Markets Inc. and TD Securities Inc. The Series 1 Preferred Shares commence trading on the Toronto Stock Exchange today under the ticker symbol EML.PR.A.

The Series 1 Preferred Shares were issued under a short form prospectus dated February 5, 2016.

EML.PR.A is a FixedReset, 5.75%+499, announced 2016-01-25. It will be tracked by HIMIPref™ and assigned to the FixedReset subindex. DBRS confirmed the provisional Pfd-2 rating.

As this issue is from an insurer and there is no provision for conversion into common shares at the option of the issuer, I consider this to be subject to my Deemed Retraction policy; accordingly I have placed a maturity entry dated 2025-1-31 at par in the call schedule of this instrument for analytical purposes. Note that this approach is due to analysis and there is no contractual provision in the terms of issue for any such maturity.

The issue traded 351,820 shares today in a range of 24.67-80 before closing at 24.73-75, 5×36. Although this looks soft, it should be remembered that between the January 25 announcement and the February 16 settlement, the TXPL index fell 3.84%, so things could have been a lot worse!

Vital statistics are:

I used the MFC series of FixedResets as a comparator with Implied Volatility analysis for this issue on the announcement date; here’s the updated chart:

Update, 2016-3-1: The Empire Life Insurance Company has announced:

that in connection with its recently completed Canadian public offering of 5.2 million Non-Cumulative Rate Reset Preferred Shares, Series 1 (the Series 1 Preferred Shares), the underwriters have exercised their option in full to purchase an additional 780,000 Series 1 Preferred Shares at $25 per share. The sale of the additional Series 1 Preferred Shares was completed today and increased the gross proceeds from the public offering by an additional $19.5 million, increasing the total size of the offering to $149.5 million.

The offering was made through a syndicate of underwriters led by Scotia Capital Inc, CIBC World Markets Inc. and TD Securities Inc.

The Series 1 Preferred Shares were issued under a short form prospectus dated February 5, 2016.

This entry was posted on Wednesday, February 17th, 2016 at 2:30 am and is filed under Issue Comments. 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.