By Cristal Cody
Tupelo, Miss., May 20 – Element Financial Corp. announced on Wednesday that it priced C$150 million of cumulative rate reset preferred shares with a 6.5% annual dividend for the initial five-year period ending Sept. 30, 2020.
The company sold 6 million shares of the series G preferred stock at C$25.00 per share.
BMO Capital Markets Corp., CIBC World Markets Inc., National Bank Financial Inc., RBC Capital Markets (Canada) Ltd. and TD Securities Inc. were the lead managers.
The deal includes an over-allotment option of C$22.5 million, or 900,000 shares.
The dividend rate will reset every five years at a rate equal to the five-year Government of Canada bond yield plus 534 basis points.
Series G preferred shareholders may convert their shares into series H cumulative floating-rate preferred shares on Sept. 30, 2020 and on Sept. 30 every five years thereafter. Series H shareholders will be entitled to receive a quarterly floating-rate dividend equal to the then current three-month Government of Canada treasury bill plus 534 bps.
Series H preferred shareholders may convert their stock into series G preferred shares on Sept. 30, 2025 and on Sept. 30 every five years thereafter.
The preferred stock sale was held in conjunction with offerings of C$1.55 billion of subscription receipts and C$500 million of extendible convertible subordinated debentures.
Element Financial said in a release that if an eligible acquisition transaction does not occur, the proceeds from the preferred share offering will be used for general corporate purposes.
Element Financial is a Toronto-based fleet management and equipment finance company.
| Issuer: | Element Financial Corp.
|
| Amount: | C$150 million, or 6 million shares
|
| Greenshoe: | C$22.5 million, or 900,000 shares
|
| Securities: | Cumulative five-year rate reset preferred shares
|
| Bookrunners: | BMO Capital Markets Corp., CIBC World Markets Inc., National Bank Financial Inc., RBC Capital Markets (Canada) Ltd. and TD Securities Inc.
|
| Co-managers: | GMP Securities L.P, Cormark Securities Inc., Desjardins Securities Inc. and Manulife Securities Inc.
|
| Dividend: | 6.5%; resets every five years at five-year Government of Canada bond yield plus 534 bps
|
| Price: | C$25 per share
|
| Pricing date: | May 20
|
| Settlement date: | May 29
|
| Distribution: | Canada
|
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