TORONTO, Aug. 31, 2016 /CNW/ - Intact Financial
Corporation ("IFC") (TSX: IFC) announced today that it does not
intend to exercise its right to redeem all or any part of the
currently outstanding Non-cumulative Rate Reset Class A Shares
Series 3 of IFC (the "Series 3 Preferred Shares") (TSX: IFC.PR.C)
on September 30, 2016. As a result,
subject to certain conditions set out in the prospectus supplement
dated August 11, 2011 relating to the
issuance of the Series 3 Preferred Shares (the "Prospectus"), the
holders thereof will have the right, at their option, to elect to
convert all or any of their Series 3 Preferred Shares into
Non-cumulative Floating Rate Class A Shares Series 4 of IFC (the
"Series 4 Preferred Shares") on a one-for-one basis on September 30, 2016. Holders who do not exercise
their right to convert their Series 3 Preferred Shares into Series
4 Preferred Shares on such date will retain their Series 3
Preferred Shares, unless automatically converted in accordance with
the conditions below.
With respect to any Series 3 Preferred Shares that remain
outstanding after September 30, 2016,
commencing as of such date, holders thereof will be entitled to
receive fixed non-cumulative preferential cash dividends on a
quarterly basis, as and when declared by the Board of Directors of
IFC. The annual dividend rate for the Series 3 Preferred Shares for
the five-year period from and including September 30, 2016 to but excluding September 30, 2021 will be 3.332%, as determined
in accordance with the terms of the Series 3 Preferred Shares.
With respect to any Series 4 Preferred Shares that may be issued
on September 30, 2016, holders
thereof will be entitled to receive floating rate non-cumulative
preferential cash dividends on a quarterly basis, as and when
declared by the Board of Directors of IFC. The dividend rate for
the Series 4 Preferred Shares for the 3-month floating rate period
from and including September 30, 2016
to but excluding December 31, 2016
will be 0.79733% (3.172% on an annualized basis), as determined in
accordance with the terms of the Series 4 Preferred Shares (the
"Floating Quarterly Dividend Rate"). The Floating Quarterly
Dividend Rate will be reset every quarter.
The foregoing conversion right is subject to the conditions
that: (i) if IFC determines that there would be less than 1,000,000
Series 3 Preferred Shares outstanding on September 30, 2016, then all remaining Series 3
Preferred Shares will automatically be converted into an equal
number of Series 4 Preferred Shares on September 30, 2016, and (ii) alternatively, if
IFC determines that there would be less than 1,000,000 Series 4
Preferred Shares outstanding on September
30, 2016, then no Series 3 Preferred Shares will be
converted into Series 4 Preferred Shares. In either case, IFC will
give written notice to that effect to any registered holders of
Series 3 Preferred Shares on or before September 23, 2016.
The Series 3 Preferred Shares are issued in "book entry only"
form and must be purchased or transferred through a participant in
the CDS depository service ("CDS Participant"). All rights of
holders of Series 3 Preferred Shares must be exercised through CDS
or the CDS Participant through which the Series 3 Preferred Shares
are held. The deadline for the registered shareholder to provide
notice of exercise of the right to convert Series 3 Preferred
Shares into Series 4 Preferred Shares is 5:00 p.m. (ET) on September 15, 2016. Any notices received after
this deadline will not be valid. As such, holders of Series 3
Preferred Shares who wish to exercise their right to convert their
shares should contact their broker or other intermediary for more
information and it is recommended that this be done well in advance
of the deadline in order to provide the broker or other
intermediary with time to complete the necessary steps.
Holders of the Series 3 Preferred Shares and the Series 4
Preferred Shares will have the opportunity to convert their shares
again on September 30, 2021, and
every five years thereafter as long as the shares remain
outstanding. Subject to certain conditions described in the
Prospectus, IFC may redeem the Series 3 Preferred Shares, in whole
or in part, on September 30, 2021 and
on September 30 every five years
thereafter and may redeem the Series 4 Preferred Shares, in whole
or in part, after September 30,
2016.
The Toronto Stock Exchange ("TSX") has conditionally approved
the listing of the Series 4 Preferred Shares effective on
conversion. Listing of the Series 4 Preferred Shares is subject to
IFC fulfilling all of the listing requirements of the TSX.
For more information on the terms of, and risks associated with
an investment in, the Series 3 Preferred Shares and the Series 4
Preferred Shares, please see IFC's prospectus supplement dated
August 11, 2011 which is available on
www.sedar.com.
Neither the Series 3 Preferred Shares nor the Series 4 Preferred
Shares have been or will be registered in the United States under the United States
Securities Act of 1933, as amended (the "Securities Act"), or the
securities laws of any state of the
United States and may not be offered, sold or delivered,
directly or indirectly, in the United
States, its territories, its possessions and other areas
subject to its jurisdiction or to, or for the account or benefit
of, a U.S. person (as defined in Regulation S under the Securities
Act), except in certain transactions exempt from, or not subject
to, the registration requirements of the Securities Act and
applicable state securities laws. This press release does not
constitute an offer to sell or a solicitation to buy securities in
the United States and any public
offering of the securities in the United
States must be made by means of a prospectus.
About Intact Financial Corporation
Intact Financial Corporation (TSX: IFC) is the largest provider of
property and casualty insurance in Canada with almost $8.0
billion in premiums. Supported by over 12,000 employees, the
company insures more than five million individuals and businesses
through its insurance subsidiaries and is the largest private
sector provider of P&C insurance in British Columbia, Alberta, Ontario, Québec, Newfoundland and Labrador and Nova
Scotia. The company distributes insurance under the Intact
Insurance brand through a wide network of brokers, including its
wholly owned subsidiary, BrokerLink, and directly to consumers
through belairdirect.
Forward-Looking Statements
Certain statements made in this news release are forward-looking
statements. These statements include, without limitation,
statements relating to future conversions, redemptions, quantum and
payment of dividends with respect to the Series 3 Preferred Shares
and the Series 4 Preferred Shares and listing of the Series 4
Preferred Shares. All such forward-looking statements are made
pursuant to the 'safe harbour' provisions of applicable Canadian
securities laws.
Forward-looking statements, by their very nature, are subject to
inherent risks and uncertainties and are based on several
assumptions, both general and specific, which give rise to the
possibility that actual results or events could differ materially
from our expectations expressed in or implied by such
forward-looking statements as a result of various factors,
including those discussed in IFC's most recently filed Annual
Information Form and annual MD&A. As a result, we cannot
guarantee that any forward-looking statement will materialize and
we caution you against relying on any of these forward-looking
statements. Except as may be required by Canadian securities laws,
we do not undertake any obligation to update or revise any
forward-looking statements contained in this news release, whether
as a result of new information, future events or otherwise. Please
read the cautionary note of IFC's most recently filed MD&A.
SOURCE Intact Financial Corporation