PrefBlog

Intact Financial Corporation has announced:

that it has closed its previously announced bought deal offering (the “Offering”) of Non-cumulative Rate Reset Class A Shares, Series 7 (the “Series 7 Preferred Shares”) underwritten by a syndicate of underwriters (the “Underwriters”) led by TD Securities Inc. together with BMO Capital Markets, CIBC Capital Markets and National Bank Financial, resulting in aggregate gross proceeds (including the proceeds resulting from the exercise of their option) to IFC of $250 million. The net proceeds from the Offering will be used by IFC for general corporate purposes.

The holders of Series 7 Preferred Shares will be entitled to receive fixed non-cumulative preferential cash dividends, as and when declared by the Board of Directors of IFC, on a quarterly basis (with the first quarterly dividend, covering the period from issuance to September 30, 2018, to be paid on September 28, 2018), for the initial fixed rate period ending on June 30, 2023, based on an annual rate of 4.90%. The dividend rate will be reset on June 30, 2023 and every five years thereafter at a rate equal to the 5-year Government of Canada bond yield plus 2.55%.

Holders of the Series 7 Preferred Shares will have the right, at their option, to convert their Series 7 Preferred Shares into Non-cumulative Floating Rate Class A Shares, Series 8 (the “Series 8 Preferred Shares”), subject to certain conditions, on June 30, 2023 and on June 30 every five years thereafter. The holders of Series 8 Preferred Shares will be entitled to receive floating rate non-cumulative preferential cash dividends, as and when declared by the Board of Directors of IFC, at a rate equal to the 90-day Canadian Treasury Bill rate plus 2.55%.

DBRS Limited has assigned a rating of Pfd-2 with a Stable trend for the Series 7 Preferred Shares.

The Series 7 Preferred Shares will commence trading on the Toronto Stock Exchange on May 29, 2018 under the symbol IFC.PR.G.

IFC.PR.G is a FixedReset, 4.90%+255, announced 2018-5-17. It will be tracked by HIMIPref™ and has been assigned to the FixedReset subindex.

As this issue is not NVCC compliant, it will be analyzed as having a Deemed Retraction – that is, a “DeemedMaturity” on 2025-1-31 will be assumed. This date may change in the future. 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 463,145 shares today in a range of 24.70-92 before closing at 24.80-82. Vital statistics are:

The TXPR price index is down 1.45% since the close prior to announcement (that is, from the close on May 16 until the close May 29), so the issue held its own against the overall market.

This entry was posted on Tuesday, May 29th, 2018 at 11:04 pm 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.