By Rebecca Melvin
New York, May 12 – Morneau Shepell Inc. has priced C$75 million of five-year convertible debentures on a bought-deal basis to yield 4.75% with an initial conversion premium of 40%, according to a news release.
The Regulation S deal has a greenshoe for up to C$11 million of additional debentures and was priced via a syndicate of underwriters co-led by National Bank Financial Inc. and TD Securities Inc.
The debentures will be convertible at the holders’ option at a conversion price of C$25.10 per share, representing a conversion rate of 39.8406 shares per bond.
The securities are non-callable until June 30, 2019 and mature June 30, 2021.
Concurrently with the new issue, Morneau Shepell has issued a notice of redemption to holders of its currently outstanding 5.75% convertible debentures due March 31, 2017. As of May 9, there were C$74.7 million principal amount of the 5.75% convertibles outstanding.
Proceeds of the new offering will initially repay debt under the company’s credit facility, which will then be available to be drawn as required to fund the redemption of the older debentures and for general corporate purposes, including future acquisitions. The redemption of the older bonds is not conditional upon the completion of the new bond offering.
Morneau Shepell is Toronto-based benefits and pension consulting firm.
| Issuer: | Morneau Shepell Inc.
|
| Issue: | Convertible debentures
|
| Amount: | C$75 million
|
| Greenshoe: | C$11 million
|
| Maturity: | June 30, 2021
|
| Bookrunners: | Syndicate co-led by National Bank Financial Inc. and TD Securities Inc.
|
| Coupon: | 4.75%
|
| Price: | Par, C$1,000
|
| Yield: | 4.75%
|
| Conversion premium: | 40%
|
| Conversion price: | C$25.10
|
| Conversion ratio: | 39.8406 shares
|
| Calls: | Non-callable until June 30, 2019
|
| Announcement date: | May 12
|
| Settlement date: | June 2
|
| Distribution: | Short form prospectus in Canada; Regulation S
|
| Stock symbol: | Toronto: MSI
|
| Stock price: | C$17.88 at close May 12
|
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