Co-operators General Insurance Company Announces $100 Million Offering of a New Series of Preference Shares
May 6, 2009
/THIS NEWS RELEASE IS NOT FOR DISSEMINATION IN THE UNITED STATES OR TO ANY UNITED STATES NEWS SERVICE/ GUELPH, ON, May 6 /CNW/ - Co-operators General Insurance Company ("Co-operators General" or the "Company") (TSX: CCS.PR.C) today announced that it has entered into an agreement with Scotia Capital Inc. and TD Securities Inc. on behalf of a syndicate of underwriters pursuant to which the underwriters have agreed to buy, on a bought deal basis, 4 million Non-Cumulative 5-Year Rate Reset Class E Preference Shares, Series D ("Series D Preference Shares") from Co-operators General for sale to the public at a price of $25.00 per Series D Preference Share, for aggregate gross proceeds of $100 million. The expected closing date of the offering is May 22, 2009. Co-operators General has granted the underwriters an over-allotment option to purchase an additional 600,000 Series D Preference Shares at the same offering price. If the underwriters' over-allotment option is exercised in full, the total gross proceeds of the Series D Preference Share offering will be $115 million. The Series D Preference Shares will yield 7.25% per annum, payable quarterly, as and when declared by the Board of Directors of the Company, for an initial period ending June 30, 2014. On June 30, 2014 and on June 30 every five years thereafter, the dividend rate will reset to be equal to the then current five-year Government of Canada bond yield plus 5.21%. Holders of the Series D Preference Shares will have the right to convert their shares into Non-Cumulative Floating Rate Class E Preference Shares, Series E of the Company (the "Series E Preference Shares"), subject to certain conditions and the Company's right to redeem the Series D Preference Shares as described below, on June 30, 2014 and on June 30 every five years thereafter. Holders of the Series E Preference Shares will be entitled to receive a quarterly floating rate dividend, as and when declared by the Board of Directors of the Company, equal to the then current three-month Government of Canada Treasury Bill yield plus 5.21%. Holders of the Series E Preference Shares may convert their Series E Preference Shares into Series D Preference Shares, subject to certain conditions and the Company's right to redeem the Series E Preference Shares as described below, on June 30, 2019 and on June 30 every five years thereafter. The Series D Preference Shares will not be redeemable prior to June 30, 2014. On June 30, 2014 and on June 30 every five years thereafter, the Company may, subject to certain conditions, redeem all or any part of the Series D Preference 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 E Preference Shares at a cash redemption price per share of $25.00 in the case of redemptions on June 30, 2019 and on June 30 every five years thereafter or $25.50 in the case of redemptions on any other date after June 30, 2014, together, in each case, with all declared and unpaid dividends to, but excluding, the redemption date. The Series D Preference Shares will be issued under a short form prospectus filed in all provinces of Canada. Net proceeds of this issue will be used for general corporate purposes. The Series D Preference Shares have not been and will not be registered in the United States under the Securities Act of 1933, as amended, and may not be offered, sold or delivered in the United States absent registration or applicable exemption from the registration requirements of such Act. This press release does not constitute an offer to sell or a solicitation to buy the Series D Preference Shares in the United States and any public offering of the shares in the United States must be made by means of a prospectus. About Co-operators General With assets of approximately $4.6 billion, Co-operators General is a leading Canadian-owned multi-product insurance company. Co-operators General is part of The Co-operators Group Ltd., a national group of companies owned by a group of Canadian co-operatives, credit union centrals and like-minded organizations that focus on insurance and investment products. Information in respect of Co-operators General can be found on the internet on www.cooperators.ca and on www.sedar.com Forward-Looking Statements -------------------------- This news release includes Forward-Looking statements with respect to Co-operators General, including its business operations and strategy as well as its financial performance and condition. These statements generally can be identified by the use of Forward-Looking words such as: "may", "will", "expect", "intend", "estimate", "anticipate", "believe", or "continue" or the negative thereof or similar variations. Although management of Co-operators General believe that the expectations reflected in such Forward-Looking statements are reasonable, such statements involve risks and uncertainties and actual results may differ materially from those expressed or implied by such Forward-Looking statements. Important factors that could cause actual results to differ materially from expectations include among other things, general economic conditions worldwide, market factors, including global capital market activity, interest rate and currency value fluctuations, business competition, changes in government regulations or in tax laws, technological changes, changes in consumer demand for the products and services of Co-operators General, catastrophic events, political conditions and developments. Co-operators General does not undertake to update any Forward-Looking statements.
For further information: Bruce West, Senior Vice-President and Chief Financial Officer, Telephone: (519) 767-3036, Fax: (519) 824-0599