IFC.PR.C / IFC.PR.D : Forced Conversion To FixedReset

Intact Financial Corporation has announced:

that 58,082 of its 8,405,004 Non-cumulative Rate Reset Class A Shares Series 3 (the “Series 3 Preferred Shares”) were tendered for conversion on September 30, 2021, on a one-for-one basis, into Non-cumulative Floating Rate Class A Shares Series 4 of IFC (the “Series 4 Preferred Shares”) after having taken into account all elections received before the September 15, 2021, 5:00 p.m. (ET) conversion deadline. Further, 886,758 of its 1,594,996 Series 4 Preferred Shares were tendered for conversion on September 30, 2021, on a one-for-one basis, into Series 3 Preferred Shares after having taken into account all elections received before the September 15, 2021, 5:00 p.m. (ET) conversion deadline. As a result of these conversions, less than 1,000,000 Series 4 Preferred Shares would remain outstanding on September 30, 2021. Therefore, no Series 3 Preferred Shares will be converted into Series 4 Preferred Shares, and all of the remaining outstanding Series 4 Preferred Shares will automatically be converted into Series 3 Preferred Shares on the basis of one Series 3 Preferred Share for each Series 4 Preferred Share, on September 30, 2021. IFC will have 10,000,000 Series 3 Preferred Shares issued and outstanding. The Series 3 Preferred Shares will continue to be listed on the Toronto Stock Exchange (“TSX”) under the symbol IFC.PR.C and the additional shares will begin trading on the TSX on September 30, 2021, subject to IFC fulfilling all the listing requirements of the TSX. The Series 4 Preferred Shares will cease trading on the TSX at market open on September 30, 2021 and will be delisted following market close on the same day.

Subject to certain conditions described in IFC’s prospectus supplement dated August 11, 2011, IFC may redeem the Series 3 Preferred Shares, in whole or in part, on September 30, 2026 and on September 30 every five years thereafter, in accordance with the terms described in IFC’s prospectus supplement dated August 11, 2011.

For more information on the terms of, and risks associated with an investment in, the Series 3 Preferred Shares and the Series 4 Preferred Shares, please see IFC’s prospectus supplement dated August 11, 2011 which is available on www.sedar.com.

IFC.PR.C was issued as a FixedReset, 4.20%+266, that commenced trading 2011-8-18 after being announced 2011-8-9. It reset to 3.332% in 2016 and there was a 16% conversion to the FloatingReset IFC.PR.D. IFC.PR.C reset to 3.457% in 2021.

IFC.PR.D is a FloatingReset, Bills+266, that arose via a partial conversion from IFC.PR.C in 2016.

Thanks to Assiduous Reader gsp for bringing this to my attention!

2 Responses to “IFC.PR.C / IFC.PR.D : Forced Conversion To FixedReset”

  1. bill2009 says:

    James: a “recent financial newsletter” gives a 2025 reset yield for ifc.pr.c of (3.23%+2.66%)*25=1.5175. Is that based on some forecast of 3,23% for the 5 yr GOC? That seems generous.

  2. jiHymas says:

    In the July edition of PrefLetter, I described the dividends on IFC.PR.C as “0.8642 until 2026-9-30; then resets to GOC-5 + 266bp paid on par = (3.23% + 2.66%) * 25 = 5.89% * 25 = 1.4725”

    I have reviewed the arithmetic and it all appears correct.

    The July PrefLetter was prepared on 2022-07-08. The value of GOC-5 used for PrefLetter was recovered on that day – probably around noon, but I don’t record that information.

    Does that answer your question? I can’t be sure, since “a recent financial newsletter” seems rather vague, if you are asking the publisher and editor of the newletter to which you are referring about his most recent edition.

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