By Cristal Cody
Eureka Springs, Ark., Nov. 23 – ECN Capital Corp. announced on Wednesday that it priced C$100 million of series A cumulative five-year minimum rate reset preferred shares with a 6.5% annual dividend for the initial period.
The company sold 4 million shares of the preferred stock at C$25.00 per share.
The offering includes an over-allotment option of C$50 million, or 2 million shares.
BMO Capital Markets Corp., CIBC World Markets Inc., National Bank Financial Inc., RBC Capital Markets (Canada) Ltd. and TD Securities Inc. were the lead managers.
The interest rate will reset every five years to the sum of the then current five-year Government of Canada bond yield and 544 basis points, with a floor of 6.5%.
ECN Capital may redeem the preferred shares on Dec. 31, 2021 and on Dec. 31 of every fifth year thereafter at par.
The shareholders will have the right to convert their series A preferred shares into series B cumulative floating-rate preferred shares on Dec. 31, 2021 and on Dec. 31 of every following fifth year.
Series B holders will be entitled to receive quarterly floating-rate cumulative preferential cash dividends equal to the sum of the then current three-month Government of Canada treasury bill yield and 544 bps.
On Dec. 31, 2026 and on Dec. 31 of every fifth year thereafter, the corporation may redeem the series B preferred shares at par. On any other date that is not a series B redemption date after Dec. 31, 2021, the corporation may redeem the shares for C$25.50 each.
Proceeds from the offering are expected to be used to originate and finance, directly and indirectly, finance assets and for general corporate purposes.
ECN Capital is a Toronto–based commercial finance company.
| Issuer: | ECN Capital Corp.
|
| Amount: | C$100 million, 4 million shares
|
| Greenshoe: | C$50 million, 2 million shares
|
| Maturity: | 2021
|
| Securities: | Cumulative five-year minimum rate reset preferred shares
|
| Bookrunners: | BMO Capital Markets Corp., CIBC World Markets Inc., National Bank Financial Inc., RBC Capital Markets (Canada) Ltd., TD Securities Inc.
|
| Dividend: | 6.5%; resets every five years at then current five-year Government of Canada bond yield plus 544 bps with a floor of 6.5%
|
| Price: | C$25.00 per share
|
| Call feature: | Dec. 31, 2021 and on Dec. 31 every fifth year thereafter at par
|
| Pricing date: | Nov. 23
|
| Settlement date: | Dec. 2
|
| Distribution: | Canada
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