Canaccord Genuity seeks approval to amend 6.25% convertibles

By Taylor Fox

New York, Jan. 19 – Canaccord Genuity Group Inc. plans to seek approval from each of the holders of its 6.25% convertible unsecured senior subordinated debentures due Dec. 31, 2023 to make amendments to the indentures, according to a news release.

Canaccord is proposing the addition of a right of the company to redeem, at its option and from time to time, between April 1 and Oct. 31, 2021, any or all of the outstanding debentures, for consideration of cash equal to the greater of 125% of the principal amount, being $1,250, and the sum of the amount calculated by multiplying 100 by the volume weighted average price of the common shares of the company for the 20 trading day period ending two trading days prior to the date upon which the company announces its intention to exercise the amended redemption right and $40.00 plus interest.

The company also intends to suspend the holders’ right to convert their debentures into common shares, at the current exercise price of $10, until Nov. 1, 2021.

The proposed amendments are conditional upon either the approval of the holders of the debentures holding at least two-thirds of the principal amount of the debentures voted in person or by proxy at a special meeting of the holders of the debentures or the written consent of the holders of the debentures holding at least two-thirds of the principal amount of the debentures outstanding.

A large Canadian asset manager, on behalf of certain of its managed accounts, has agreed to support the amendments and has entered into an agreement with the company to consent and vote in favor of the amendments. These accounts hold 55.4% of the outstanding debentures.

The company is proposing these amendments to assist in its capital planning and in its allocation of capital resources if, and to the extent that such resources change and become available during the course of the coming year, and to provide greater certainty as to its overall cost of capital.

The record date for determining the holders entitled to receive notice of and vote at the special meeting will be Jan. 22.

The independent financial services company is based in Toronto.

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