By Cristal Cody
Tupelo, Miss., Dec. 10 - Element Financial Corp. announced on Tuesday that it upsized its offering of 6.6% cumulative five-year rate reset preferred shares to C$100 million from the C$75 million of stock priced on Monday.
The company increased the C$25-per-share offering of series A preferred stock to 4 million shares from 3 million shares.
GMP Securities LP, National Bank Financial Inc., BMO Nesbitt Burns Inc., CIBC World Markets Inc., RBC Dominion Securities Inc. and TD Securities Inc. were the co-lead managers.
The deal's over-allotment option also was increased to 600,000 series A preferred shares for additional proceeds of C$15 million, up from a greenshoe of 450,000 shares.
After the initial period ends Dec. 31, 2018, the dividend rate on the preferred shares will reset every five years to an annual dividend rate equal to the five-year Government of Canada bond yield plus 471 basis points.
Holders of the series A preferred shares will have the right to convert their shares into series B cumulative floating-rate preferred shares on Dec. 31, 2018 and on Dec. 31 every five years thereafter. Series B preferred shareholders will be entitled to receive a quarterly floating-rate dividend equal to the then current three-month Government of Canada Treasury bill yield plus 471 bps.
Holders of the series B preferred shares may convert their shares into series A preferred shares on Dec. 31, 2023 and on Dec. 31 every five years thereafter.
The series A preferred shares will not be rated.
The company also upsized an offering of common shares to C$400 million from C$325 million at C$13.75 per share. The stock offering includes a greenshoe of up to C$60 million of common shares.
Element Financial, a Toronto-based equipment finance company, plans to use the proceeds to originate and finance, directly or indirectly, assets and for general corporate purposes.
| Issuer: | Element Financial Corp.
|
| Amount: | C$100 million, 4 million shares
|
| Greenshoe: | C$15 million, 600,000 shares
|
| Maturity: | Dec. 31, 2018
|
| Securities: | Cumulative five-year rate reset preferred shares
|
| Bookrunners: | GMP Securities LP, National Bank Financial Inc., BMO Nesbitt Burns Inc., CIBC World Markets Inc., RBC Dominion Securities Inc., TD Securities Inc.
|
| Co-managers: | Manulife Securities Inc., Hampton Securities Ltd.
|
| Dividend: | 6.6%; resets Dec. 31, 2018 and every five years thereafter at five-year Government of Canada bond yield plus 471 bps
|
| Price: | C$25.00 per share
|
| Pricing date: | Dec. 10
|
| Settlement date: | Dec. 17
|
| Ratings: | None
|
| Distribution: | Canada
|
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