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Constellation Software to pay down credit facility via rights offering
By Angela McDaniels
Tacoma, Wash., Aug. 3 – Constellation Software Inc. said it plans to issue up to C$700 million principal amount of debentures through a rights offering and use the proceeds to pay down debt under its credit facility.
Any remaining proceeds will be used for future acquisitions, according to a company news release.
The debentures will be an add-on to the company’s C$284.2 million principal amount of outstanding floating-rate series 1 subordinated debentures due 2040.
The rights are expected to be issued in satisfaction of a dividend to be declared by the company on its common shares.
Shareholders will receive one right per share. For every 3.03 rights held, the holder will be entitled to subscribe for C$100 principal amount of debentures.
The company said it anticipates that the debentures will be issued at a premium to their principal amount.
Initially, the interest rate on the debentures will be 13.3%. Beginning March 31, 2024, the rate will reset each year at a rate equal to the annual average percentage change in the All-items Consumer Price Index during the 12-month period ending on Dec. 31 in the prior year plus 6.5%.
Constellation acquires, manages and builds vertical market software businesses and is based in Toronto.
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