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WINNIPEG, Manitoba, July 12, 2021 (GLOBE NEWSWIRE) — Exchange Income Corporation (TSX: EIF) (“EIC” or the “Corporation”) announced today that it has reached an agreement with a syndicate of underwriters co-led by National Bank Financial Inc. and CIBC Capital Markets (the “Underwriters”), pursuant to which the Corporation will issue on a bought deal basis, subject to regulatory approval, $125,000,000 aggregate principal amount of convertible unsecured subordinated debentures (the “Debentures”) at a price of $1,000 per principal amount of Debentures (the “Offering”). The Corporation has granted to the Underwriters an over-allotment option to purchase up to an additional $18,750,000 aggregate principal amount of Debentures at the same price, exercisable in whole or in part at any time for a period of up to 30 days following closing of the Offering, to cover over-allotments.
The Corporation intends to use the net proceeds from the Offering to fund the redemption of certain debentures as set forth below and to reduce indebtedness under the credit facility of the Corporation. The Debentures will bear interest from the date of closing at 5.25% per annum, payable semi-annually in arrears on July 31 and January 31 each year commencing January 31, 2022. The Debentures will have a maturity date of July 31, 2028 (the “Maturity Date”).
The Debentures will be convertible at the holder’s option at any time prior to the close of business on the earlier of the Maturity Date and the business day immediately preceding the date specified by the Corporation for redemption of the Debentures into common shares of the Corporation (“Common Shares”) at a conversion price of approximately $52.70 per Common Share, being a conversion rate of 18.9753 Common Shares for each $1,000 principal amount of Debentures, subject to adjustment as provided in the indenture governing the Debentures.
The Corporation also announced that it will issue a notice of redemption to the holders of its currently outstanding 7 year 5.25% convertible unsecured subordinated debentures maturing on June 30, 2023 (the “2016 Debentures”). The Corporation has the right to redeem the 2016 Debentures after June 30, 2021, and subject to all necessary approvals, will redeem all issued and outstanding 2016 Debentures following the closing of the Offering on a date to be determined by the Corporation (the “Redemption Date”). Holders of the 2016 Debentures will have the option to convert the 2016 Debentures into Common Shares prior to the Redemption Date at a price of $44.75 per share. The 2016 Debentures are redeemable at a redemption price equal to their principal amount, plus accrued and unpaid interest thereon up to, but excluding, the Redemption Date. As of the close of business on July 12, 2021, there was approximately $69 million principal amount of 2016 Debentures…
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