IFC.PR.F Soft on Muted Volume

Intact Financial Corporation has announced:

that it has closed its previously announced bought deal offering of 6,000,000 Class A Series 6 Preferred Shares (the “Series 6 Shares”) (the “Offering”) underwritten by a syndicate of underwriters (the “Underwriters”) led by CIBC Capital Markets together with BMO Capital Markets, National Bank Financial and TD Securities Inc., resulting in gross proceeds to IFC of $150 million.

The net proceeds from the Offering are intended to be used by IFC to fund a portion of the purchase price for its previously announced acquisition (the “Acquisition”) of all of the issued and outstanding shares of OneBeacon Insurance Group, Ltd. (“OneBeacon”). The closing of the Acquisition is expected to occur in the third quarter or early fourth quarter of 2017 and is subject to receipt of required regulatory approvals. If the Acquisition is not completed, the net proceeds of this Offering will be used for general corporate purposes.

Each Series 6 Share entitles the holder thereof to receive quarterly non-cumulative preferential cash dividends, if, as and when declared by the Board of Directors, on the last day of March, June, September and December in each year at a rate equal to $0.33125 per share. The initial dividend, if declared, will be paid on December 29, 2017 and will be $0.49007 per share.

The Series 6 Shares will commence trading today on the Toronto Stock Exchange under the symbol IFC.PR.F.

IFC.PR.F is a Straight Perpetual, 5.30%, announced 2017-08-09. It will be tracked by HIMIPref™ and assigned to the DeemedRetractibles sub-index.

As this issue is not NVCC compliant, it will be analyzed as a DeemedRetractible. Note, however, that this carries more uncertainty than it does with most other insurers because Intact is a P&C insurer, not a life company.

The issue traded 259,384 shares on its opening day of 2017-8-18 in a range of 24.75-94 before closing at 24.82-83. Vital Statistics are:

IFC.PR.F Deemed-Retractible YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2025-01-31
Maturity Price : 25.00
Evaluated at bid price : 24.82
Bid-YTW : 5.46 %

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