By Angela McDaniels
Tacoma, Wash., June 3 - Element Financial Corp. increased the size of its bought-deal offering of series E cumulative five-year rate-reset preferred shares to C$125 million from C$100 million, according to a company news release.
There is a an C$18.75 million greenshoe.
The preferreds priced at par of C$25.
The syndicate of underwriters is co-led by BMO Nesbitt Burns Inc., CIBC World Markets Inc., GMP Securities LP, National Bank Financial Inc. and TD Securities Inc. and includes RBC Dominion Securities Inc., Scotia Capital Inc., Cormark Securities Inc. and Manulife Securities Inc.
The dividend rate is 6.4% until Sept. 30, 2019, at which point the rate will reset every five years to the yield on the five-year Government of Canada bond plus 472 basis points.
The preferreds are callable on Sept. 30, 2019 and every five years subsequently.
If the preferreds are not redeemed, holders will have the right to convert them to cumulative series F preferred shares that will pay a dividend equal to the three-month Government of Canada Treasury bill yield plus 472 bps.
The proceeds of the preferreds, together with the proceeds of C$300 million of convertible debentures and C$825.05 million of subscription receipts, will be used to fund the acquisition of PHH Corp.'s fleet management services business.
If the acquisition does not proceed, the proceeds of the preferreds will instead be used to originate and finance assets and for general corporate purposes.
Element Financial is a Toronto-based equipment finance company.
| Issuer: | Element Financial Corp.
|
| Issue: | Series E rate-reset preferred share
|
| Amount: | C$125 million, increased from C$100 million
|
| Shares: | 5 million, increased from 4 million
|
| Greenshoe: | C$18.75 million
|
| Underwriters: | BMO Nesbitt Burns Inc., CIBC World Markets Inc., GMP Securities LP, National Bank Financial Inc., TD Securities Inc. (co-leads), includes RBC Dominion Securities Inc., Scotia Capital Inc., Cormark Securities Inc. and Manulife Securities Inc.
|
| Dividend: | 6.4% through Sept. 30, 2019, then resets every years to five-year Government of Canada bond yield plus 472 bps
|
| Price: | Par of C$25
|
| Call option: | On Sept. 30, 2019 and every five years subsequently
|
| Pricing date: | June 2
|
| Upsized: | June 3
|
| Settlement date: | June 18
|
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