(Alliance News) - Intact Financial Corp on Monday continued in its efforts to raise cash to help fund its portion of the acquisition of RSA Insurance Group PLC.
Intact will issue CAD250 million, about USD198 million, of 4.125% fixed-to-fixed rate subordinated notes, series 1, due March 2081.
The notes will be converted automatically into non-cumulative class A shares.
The notes are offered on an underwritten basis through a syndicate of underwriters co-led by CIBC Capital Markets, National Bank Financial Markets and TD Securities, and will be issued on Wednesday.
Intact has previously issued CAD600 million in notes and completed a CAD3.2 billion private cornerstone placement.
Intact has already secured unconditional approval for its takeover of RSA by the Canadian regulators, and the majority of RSA shareholders voted to approve the takeover scheme in mid-January.
The deal is expected to complete in the second quarter of 2021.
In mid-November, RSA Insurance had agreed to be sold in a deal with a two-headed consortium which valued the insurer at GBP7.2 billion.
The deal will see the insurer divided between Canada's Intact and Scandinavian insurer Tryg AS. Tryg's contribution will be GBP4.2 billion with Intact's portion of the deal amounting to GBP3.0 billion.
Under the deal, RSA shareholders will receive 685 pence in cash for each share. In addition, RSA shareholders will be entitled to receive the insurer's interim dividend of 8p.
Shares in RSA were 0.2% higher in London on Monday morning at 682.40 pence each.
By Paul McGowan; paulmcgowan@alliancenews.com
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