Great-West Lifeco Inc. has announced:
that it has entered into an agreement with a syndicate of underwriters co-led by BMO Capital Markets, CIBC Capital Markets, Scotiabank, and TD Securities Inc. pursuant to which the underwriters have agreed to purchase, on a bought deal basis, 6,000,000 Non-Cumulative First Preferred Shares, Series T (the “Series T Shares”) from Lifeco for sale to the public at a price of $25.00 per Series T Share, representing aggregate gross proceeds of $150 million.
Lifeco has granted the underwriters an underwriters’ option to purchase an additional 2,000,000 Series T Shares at the same offering price. Should the underwriters’ option be fully exercised, the total gross proceeds of the Series T Shares offering will be $200 million.
The Series T Shares will yield 5.15% per annum, payable quarterly, as and when declared by the Board of Directors of the Company. The Series T Shares will not be redeemable prior to June 30, 2022. On and after June 30, 2022, Lifeco may, on not less than 30 nor more than 60 days’ notice, redeem for cash the Series T Shares in whole or in part, at the Company’s option, at $26.00 per share if redeemed on or after June 30, 2022 and prior to June 30, 2023; $25.75 per share if redeemed on or after June 30, 2023 and prior to June 30, 2024; $25.50 per share if redeemed on or after June 30, 2024 and prior to June 30, 2025; $25.25 per share if redeemed on or after June 30, 2025 and prior to June 30, 2026; and $25.00 per share if redeemed on or after June 30, 2026, in each case together with all declared and unpaid dividends up to but excluding the date of redemption.
The Series T Share offering is expected to close on May 18, 2017. The net proceeds will be used for general corporate purposes and to augment Lifeco’s current liquidity position.
They later announced:
that due to strong demand, the underwriters have exercised their option to purchase an additional 2,000,000 Non-Cumulative First Preferred Shares, Series T (the “Series T Shares”), which increases the size of the previously announced bought deal public offering to 8,000,000 Series T Shares for gross proceeds of $200 million. The Series T Shares will be priced at $25.00 per share and will carry an annual dividend yield of 5.15%. Closing is expected to occur on or about May 18, 2017. The issue will be underwritten by a syndicate of underwriters co-led by BMO Capital Markets, CIBC Capital Markets, Scotiabank, and TD Securities Inc.
This new issue carries the same dividend as GWO.PR.Q, which commenced trading 2012-7-6 after being announced 2012-6-28.
As this issue is not NVCC compliant, it will be analyzed as a DeemedRetractible.
I consider the following two points rather interesting when taken together:
- GWO is generally acknowledged to be the best managed and most conservative of the big life insurers
- GWO has issued many more Straights than FixedResets since the inception of the latter class
Implied Volatility analysis of the GWO Straights indicates that the issue is well priced, with a theoretical price of 25.02:
Click for Big
I thought it as well. Not sure how TD allocation system works but I ordered 1K units and got only 200.