Constellation Software to sell C$100 million notes via rights offering

By Angela McDaniels

Tacoma, Wash., June 16 – Constellation Software Inc. plans to issue up to C$100 million principal amount of fixed-to-floating-rate subordinated debentures due March 31, 2040 through a rights offering, according to a company news release.

The offering is subject to a minimum issue size of C$500 million.

The debentures will have a face amount of C$100 each.

The initial interest rate will be 7.4%. Beginning on March 31, 2015, the interest rate will be reset annually to equal 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, which may be positive or negative, plus 650 basis points. Interest will be payable quarterly and cannot be less than zero.

The debentures will be callable and putable at par annually beginning on March 31, 2015. However, at least five years’ notice must be given, so the earliest that the debentures could be redeemed via a call or repurchased via a put is March 31, 2020.

The company expects to use the proceeds to pay down debt under its credit facility.

Rights offering

Shareholders will receive one right for each common share held, and they will be able to subscribe for C$100 principal amount of debentures for every 21.192 rights held.

The rights will be exercisable until 4:30 p.m. ET on Nov. 7 at a price of C$95 per C$100 principal amount of debentures purchased.

Rights not fully exercised prior to the expiry time will be void.

Constellation acquires, manages and builds vertical market software businesses and is based in Toronto.

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