TORONTO, May 31, 2023
/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 7 of IFC (the "Series 7 Preferred
Shares") (TSX: IFC.PR.G) on June 30,
2023. As a result, subject to certain conditions set out in
the prospectus supplement dated May 22,
2018 to the short form base shelf prospectus dated
November 15, 2017 (the "Prospectus"),
relating to the issuance of the Series 7 Preferred Shares, the
holders of the Series 7 Preferred Shares will have the right, at
their option, to elect to convert all or any of their Series 7
Preferred Shares into Non-cumulative Floating Rate Class H Shares
Series 8 of IFC (the "Series 8 Preferred Shares") on a one-for-one
basis on June 30, 2023. Holders who
do not exercise their right to convert their Series 7 Preferred
Shares into Series 8 Preferred Shares on such date will retain
their Series 7 Preferred Shares, unless automatically converted in
accordance with the conditions below.
With respect to any Series 7 Preferred Shares that may remain
outstanding after June 30, 2023, 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 7 Preferred Shares for the five-year period from and
including June 30,2023 to but
excluding June 30, 2028, will be
6.012%, as determined in accordance with the terms of the Series 7
Preferred Shares.
With respect to any Series 8 Preferred Shares that may be issued
on June 30, 2023, 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 8 Preferred Shares for the
3-month floating rate period from and including June 30, 2023, to but excluding September 30, 2023, will be 1.79287%
(7.113% on an annualized basis), as determined in accordance
with the terms of the Series 8 Preferred Shares (the "Floating
Quarterly Dividend Rate"). The Floating Quarterly Dividend Rate
will be reset every quarter.
The foregoing conversion right for the Series 7 Preferred Shares
is subject to the conditions that: (i) if IFC determines that there
would be less than 1,000,000 Series 7 Preferred Shares outstanding
on June 30, 2023, then all remaining
Series 7 Preferred Shares will automatically be converted into an
equal number of Series 8 Preferred Shares on June 30, 2023, and (ii) alternatively, if IFC
determines that there would be less than 1,000,000 Series 8
Preferred Shares outstanding on June 30,
2023, then no Series 7 Preferred Shares will be converted
into Series 8 Preferred Shares. In either case, IFC will give
written notice to that effect to any registered holders of Series 7
Preferred Shares on or before June 22,
2023.
The Series 7 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 7 Preferred Shares must be exercised through CDS
or the CDS Participant through which the Series 7 Preferred Shares
are held. The deadline for the registered shareholder of any Series
7 Preferred Shares to provide notice of exercise of the right to
convert is 5:00 p.m. (ET) on
June 15, 2023. Any notices received
after this deadline will not be valid. As such, beneficial holders
of Series 7 Preferred Shares who wish to exercise their right to
convert their shares during the conversion period, which will run
from Wednesday, May 31, 2023 until
5:00 p.m. (ET) on Thursday, June 15,
2023, 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 7 Preferred Shares and the Series 8
Preferred Shares (if issued on June 30,
2023) will have the opportunity to convert their shares
again on June 30, 2028, 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 7 Preferred Shares, in whole or in part, on
June 30, 2028, and on June 30 every five years thereafter and may
redeem the Series 8 Preferred Shares (if issued), in whole or in
part, on any date after June 30,
2023.
The Toronto Stock Exchange ("TSX") has conditionally approved
the listing of the Series 8 Preferred Shares effective on
conversion. Listing of the Series 8 Preferred Shares is subject to
IFC fulfilling all the listing requirements of the TSX.
For more information on the terms of, and risks associated with
an investment in, the Series 7 Preferred Shares and the Series 8
Preferred Shares, please see IFC's prospectus supplement dated
May 22, 2018, which is available on
www.sedar.com.
Neither the Series 7 Preferred Shares nor the Series 8 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 (P&C) insurance in Canada, a leading provider of global specialty
insurance, and, with RSA, a leader in the U.K. and Ireland. Our business has grown organically
and through acquisitions to over $21
billion of total annual premiums.
In Canada, Intact 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. Intact also provides
affinity insurance solutions through the Johnson Affinity
Groups.
In the US, Intact Insurance Specialty Solutions provides a range
of specialty insurance products and services through independent
agencies, regional and national brokers, and wholesalers and
managing general agencies.
In the U.K., Ireland, and
Europe, Intact provides personal,
commercial and specialty insurance solutions through the RSA
brands.
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 7 Preferred Shares
and the Series 8 Preferred Shares, and the listing of the Series 8
Preferred Shares. All such forward-looking statements are made
pursuant to the 'safe harbour' provisions of applicable Canadian
securities laws. Unless otherwise indicated, all forward-looking
statements in this press release are made as of May 31st, 2023 and are subject to change after
that date.
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 the Company's most recently filed
Annual Information Form dated February 7,
2023 and Q1-2023 Management's Discussion and Analysis
("Q1-2023 MD&A") available on SEDAR at www.sedar.com. 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 at the beginning of
the Q1-2023 MD&A available on SEDAR.
SOURCE Intact Financial Corporation