By Rebecca Melvin
New York, May 16 – Exchange Income Corp. priced C$60 million of convertible unsecured subordinated debentures on a bought-deal basis at par to yield 6% with an initial conversion premium of 40%, according to a news release.
The convertibles were “bought” by a syndicate of underwriters co-led by National Bank Financial Inc. and Laurentian Bank Securities Inc. and including CIBC World Markets Inc., BMO Capital Markets, RBC Capital Markets Inc., Scotiabank, TD Securities Inc., Raymond James Ltd. AltaCorp Capital Inc., Canaccord Genuity Corp., and Macquarie Capital Markets Canada Ltd.
The paper will be distributed by way of a short-form prospectus in Canada and under Rule 144A in the United States. There is a greenshoe of C$9 million of debentures to cover over-allotments.
Proceeds will be used to reduce debt and for general corporate purposes.
Closing of the offering, subject to normal regulatory approvals, is expected to occur June 7.
Exchange Income also announced that it is offering to redeem its 6.25% series J convertible debentures maturing May 31, 2018. Holders have the option to convert their debentures into common shares prior to the redemption date of June 30. There was about C$57.5 million principal amount of the series J debentures outstanding as of May 13.
Winnipeg, Man.-based Exchange Income is an open-ended, limited-purpose trust focused on the industrial products and transportation sectors.
| Issuer: | Exchange Income Corp.
|
| Issue: | Convertible unsecured subordinated debentures
|
| Amount: | C$60 million
|
| Greenshoe: | C$9 million
|
| Maturity: | June 20, 2023
|
| Underwriters: | Syndicate co-led by National Bank Financial Inc. and Laurentian Bank Securities Inc. and including CIBC World Markets Inc., BMO Capital Markets, RBC Capital Markets Inc., Scotiabank, TD Securities Inc., Raymond James Ltd. AltaCorp Capital Inc., Canaccord Genuity Corp. and Macquarie Capital Markets Canada Ltd.
|
| Coupon: | 5.25%
|
| Price: | Par of C$1,000
|
| Yield: | 5.25%
|
| Conversion premium: | 40%
|
| Conversion price: | C$44.75 per share
|
| Conversion rate: | 22.3464 shares
|
| Pricing date: | May 16
|
| Settlement date: | June 7
|
| Stock symbol: | Toronto: EIF
|
| Stock reference price: | C$31.93 at close May 16
|
| Distribution: | Rule 144A, public short form prospectus in Canada
|
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