By Rebecca Melvin
New York, May 20 – Element Financial Corp. priced C$500 million of extendible convertible debentures on a bought-deal basis at par to yield 4.25% with an initial conversion premium of 40%, according to a news release.
Element also priced C$1.55 billion of subscription rights and $150 million of preferred stock for a combined capital raise of C$2.2 billion to fund acquisitions.
The convertibles will be convertible into shares at the option of holders after the completion of an acquisition and prior to June 30, 2020 at a conversion price of C$23.80 per share, representing a conversion rate of 42.0168 shares. If the acquisition is not completed, the debentures have a termination date of Dec. 31, 2015.
There is an over-allotment option for up to an additional C$75 million of debentures.
The convertibles deal was led by BMO Capital Markets and includes Barclays Capital Canada Inc., CIBC World Markets Inc., National Bank Financial Inc., RBC Capital Markets, TD Securities, Credit Suisse Securities (Canada) Inc., GMP Securities LP, Manulife Securities Inc., Cormark Securities Inc. and Desjardins Securities Inc.
The 91.2 million subscription receipts have a strike price of C$17.00 per receipt, and the 6 million of 6.5% series G preferred shares are being sold at a price of C$25.00 per share.
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 May 29.
The Element Financial is a Toronto-based equipment finance company.
| Issuer: | Element Financial Corp.
|
| Issue: | Extendible convertible debentures
|
| Amount: | C$500 million
|
| Greenshoe: | C$75 million
|
| Maturity: | Initial maturity Dec. 31, 2015, extendible to June 30, 2020 when the acquisition is completed
|
| Underwriters: | BMO Capital Markets (lead) and Barclays Capital Canada Inc., CIBC World Markets Inc., National Bank Financial Inc., RBC Capital Markets, TD Securities, Credit Suisse Securities (Canada) Inc., GMP Securities LP, Manulife Securities Inc., Cormark Securities Inc., Desjardins Securities Inc.
|
| Coupon: | 4.25%
|
| Price: | Par, C$1,000
|
| Yield: | 4.25%
|
| Conversion premium: | 40%
|
| Conversion price: | C$23.80
|
| Conversion ratio: | 42.0168 shares
|
| Pricing date: | May 20
|
| Settlement date: | May 29
|
| Stock symbol: | Toronto: EFN
|
| Stock reference price: | C$17.00
|
| Stock price | C$17.88 at close May 20
|
| Market capitalization: | C$4.72 billion
|
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