By Rebecca Melvin
New York, June 2 - Element Financial Corp. priced C$250 million of extendible convertible debentures on a bought deal basis to yield 5.125%, with an initial conversion premium of 40%, according to a release.
The deal was led by BMO Nesbitt Burns Inc. The syndicate included CIBC World Markets Inc., GMP Securities LP, National Bank Financial Inc., TD Securities Inc., Barclays Capital Canada Inc., Credit Suisse Securities (Canada) Inc., RBC Dominion Securities Inc., Scotia Capital Inc., Cormark Securities Inc. and Manulife Securities Inc.
There is a greenshoe of $37.5 million of debentures.
Proceeds of the convertibles together with C$750 million of subscription receipts and C$100 million of preferred shares will be used to fund the acquisition of PHH Corp.'s fleet management services business.
The debentures are convertible after the closing of the acquisition at C$17.85 per common share, representing a conversion rate of 56.0224 shares per $1,000 principal amount of debentures.
The debentures will have an initial maturity date of Dec. 31, 2014, which will automatically be extended to June 30, 2019 upon closing of the acquisition.
The debentures, the subscription receipts and the preferred shares are being sold publicly in Canada under a short-form prospectus. The deals are expected to close June 18.
Element Financial is a Toronto-based equipment finance company.
| Issuer: | Element Financial Corp.
|
| Issue: | Extendible convertible debentures
|
| Amount: | C$250 million
|
| Greenshoe: | C$37.5 million
|
| Maturity: | Initial maturity Dec. 31, 2014, extendible to June 30, 2019 when the acquisition is completed
|
| Underwriters: | BMO Nesbitt Burns Inc. (lead), CIBC World Markets Inc., GMP Securities LP, National Bank Financial Inc., TD Securities Inc., Barclays Capital Canada Inc., Credit Suisse Securities (Canada) Inc., RBC Dominion Securities Inc., Scotia Capital Inc., Cormark Securities Inc. and Manulife Securities Inc.
|
| Coupon: | 5.125%
|
| Price: | Par, C$1,000
|
| Yield: | 5.125%
|
| Initial conversion premium: | 40%
|
| Initial conversion price: | C$17.85
|
| Initial conversion ratio: | 56.0224 shares
|
| Pricing date: | June 2
|
| Settlement: | June 18
|
| Stock symbol: | Toronto: EFN
|
| Stock reference price: | C$12.75
|
| Stock price | C$13.30 at close June 2
|
| Market capitalization: | C$2.52 billion
|
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