Industrial Alliance has announced it:
has today entered into an agreement with a syndicate of underwriters led by Scotia Capital Inc. under which the underwriters have agreed to buy, on a bought deal basis, 4,000,000 Non-Cumulative 5-Year Rate Reset Class A Preferred Shares Series C (the “Series C Preferred Shares”) from Industrial Alliance for sale to the public at a price of $25.00 per Series C Preferred Share, representing aggregate gross proceeds of $100 million.
Industrial Alliance has granted an option to the underwriters, exercisable by the underwriters at any time up to 48 hours prior to closing of the offering, to purchase up to an additional 600,000 Series C Preferred Shares, representing $15 million at the Issue Price.
Holders of the Series C Preferred Shares will be entitled to receive a non-cumulative quarterly fixed dividend of $0.3875 per Series C Preferred Share, yielding 6.20% per annum, as and when declared by the Board of Directors of the Company, for an initial period ending December 31, 2013. On December 31, 2013 and on December 31 every five years thereafter, the dividend rate will reset to be equal to the then current five-year Government of Canada bond yield plus 3.38%. Holders of the Series C Preferred Shares will have the right to convert their shares into Non-Cumulative Floating Rate Class A Preferred Shares Series D (the “Series D Preferred Shares”), subject to certain conditions and the Company’s right to redeem the Series C Preferred Shares as described below, on December 31, 2013 and on December 31 every five years thereafter.
Holders of the Series D Preferred Shares will be entitled to receive a quarterly non-cumulative floating rate dividend, as and when declared by the Board of Directors of the Company, equal to the 90-day Government of Canada Treasury Bill Rate plus 3.38%. Holders of the Series D Preferred Shares will have the right to convert their shares into Series C Preferred Shares, subject to certain conditions and the Company’s right to redeem the Series D Preferred Shares as described below, on December 31, 2018 and on December 31 every five years thereafter.
The Series C Preferred Shares will not be redeemable by Industrial Alliance prior to December 31, 2013. On December 31, 2013 and on December 31 every five years thereafter, Industrial Alliance may, subject to certain conditions (including regulatory approval), redeem all or any part of the Series C Preferred Shares at a cash redemption price per share of $25.00 together with all declared and unpaid dividends. The Company may redeem all or any part of the Series D Preferred Shares at a cash redemption price per share of $25.00 together with all declared and unpaid dividends in the case of redemptions on December 31, 2018 and on December 31 every five years thereafter or $25.50 together with all declared and unpaid dividends in the case of redemptions on any other date after December 31, 2013.
The Series C Preferred Share offering is expected to close on or about November 25, 2008. The net proceeds will be used for general corporate purposes and will be added to Industrial Alliance’s capital base.
According to pro forma data as at September 30, 2008, a $100 million preferred share issue will increase Industrial Alliance’s solvency ratio from 200% to 210% and a $115 million issue will increase it from 200% to 212%.
The issue is rated: S&P: P-1(Low); DBRS: Pfd-2 (high).
The first dividend is for $0.5391, payable 2009-3-31 based on closing 2008-11-25.
Update, 2013-10-24: Trades as IAG.PR.C.
[…] It would appear that no additional shares were sold by way of the greenshoe noted in the original announcement […]