Intact Financial will issue CAD $250.0m (£143.95m) of 4.125% fixed-to-fixed rate subordinated notes in relation to its recommended cash offer for FTSE 250 constituent RSA Insurance.
Intact stated on Monday that the notes were being offered by way of a private placement to accredited investors and would be converted automatically into non-cumulative class A shares.
The TSE-listed firm will use the net proceeds from the placement to fund a portion of its purchase of RSA. However, Intact added that if the acquisition was not completed, the net proceeds of the private placement would be used for “general corporate purposes”.
Intact added that the notes, offered on an underwritten basis through a syndicate of underwriters co-led by CIBC Capital Markets, National Bank Financial Markets, and TD Securities, were expected to be issued on or about 31 March. In consideration for their services, Intact agreed to pay the underwriters a fee equal to 0.75% of the aggregate principal amount of the notes.
As of 0820 GMT, Intact shares were down 1.37% at CAD $151.72 each, while RSA shares were up 0.18% at 682.40p.
