Intact series 3, 4 preferreds will not be called, convertible instead

By Rebecca Melvin

Concord, N.H., Aug. 31 – Intact Financial Corp. announced it does not intend to exercise its right to redeem all or any part of its currently outstanding non-cumulative rate-reset class A series 3 preferred shares or non-cumulative floating-rate class A series 4 preferred shares on Sept. 30, according to a company release.

As a result, holders of the series 3 preferred shares will have the right to convert all or any of their series 3 preferred shares into series 4 preferred shares on a one-for-one basis on Sept. 30.

Likewise, holders of the series 4 preferred shares will have the right to convert all or some of their shares into series 3 preferred shares on a one-for-one basis on Sept. 30.

Holders who do not exercise their right to convert their series 3 or series 4 preferreds will retain their series 3 or series 4 preferreds, respectively, unless they are automatically converted.

Holders will be entitled to receive fixed non-cumulative preferential cash dividends on a quarterly basis and as declared for any series 3 preferred shares that remain outstanding after Sept. 30. The annual dividend rate for the series 3 preferred shares for the five-year period from and including Sept. 30, 2021 to but excluding Sept. 30, 2026 will be 3.457%.

Any series 4 preferreds that may remain outstanding will accrue floating-rate non-cumulative preferential cash dividends on a quarterly basis. The dividend rate for the series 4 preferreds for the three-month floating-rate period from and including Sept. 30 but excluding Dec. 31, will be 0.7176% (2.847% on an annualized basis). The floating quarterly dividend rate will be reset every quarter.

For each series, if the company determines that there would be less than 1 million shares outstanding on Sept. 30, then all remaining preferreds of that series will automatically be converted into an equal number of preferreds of the other series. Alternatively, if the company determines that there would be less than 1 million preferreds of the other series outstanding on Sept. 30, then no preferreds will be converted.

The deadline to exercise the conversion right is 5 p.m. ET on Sept.15.

Holders of both series will have the opportunity to convert their shares again on Sept. 30, 2026 and every five years thereafter as long as the shares remain outstanding. Subject to some conditions, the company may redeem the series 3 preferreds, in whole or in part, on those dates.

Intact is a Toronto-based insurance provider.

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