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TORONTO, June 23, 2021 (GLOBE NEWSWIRE) -- Timbercreek Financial Corp. (TSX: TF) (“Timbercreek Financial” or the “Company”) today announced that, due to strong demand, it has increased the size of the previously announced bought deal offering (the “Offering”) to $50 million aggregate principal amount of 5.25% convertible unsecured subordinated debentures of the Company due July 31, 2028 (the “Debentures”) at a price of $1,000 per Debenture. The Company has entered into an agreement with a syndicate of underwriters led by National Bank Financial Inc. and TD Securities Inc. The Company has also granted to the underwriters an over-allotment option to purchase up to an additional $5 million aggregate principal amount of Debentures at the same price, exercisable in whole or in part at any time for a period of up to 30 days following closing of the Offering. If the over-allotment option is exercised in full, the gross proceeds of the offering will total $55 million.
The Company intends to use the net proceeds of the Offering to repay amounts owing under its secured revolving credit facility, and to subsequently draw on the credit facility for the purpose of redeeming its 5.45% convertible unsecured debentures due March 31, 2022 (the “5.45% Debentures”) as further described below.
The Debentures will mature on July 31, 2028 and will accrue interest at the rate of 5.25% per annum payable semi-annually in arrears on January 31 and July 31 of each year, commencing January 31, 2022. At the holder’s option, the Debentures may be converted into common shares of the Company at any time prior to the close of business on the earlier of the business day immediately preceding the maturity date and the business day immediately preceding the date (if any) fixed for redemption of the Debentures. The conversion price will be $11.40 for each common share, subject to adjustment in certain circumstances. The Debentures will not be redeemable before July 31, 2024. On and after July 31, 2024 and prior to July 31, 2026, the Debentures may be redeemed, in whole or in part, from time to time at the Company’s option at par plus accrued and unpaid interest, provided that the weighted average trading price of the common shares of the Company on the Toronto Stock Exchange (the “TSX”) during the 20 consecutive trading days ending on the fifth trading day preceding the date on which notice of the redemption is given is not less than 125% of the conversion price. On and after July 31, 2026, the Company may, at its option, redeem the Debentures, in whole or in part, from time to time at par plus accrued and unpaid interest.
The Offering is expected to close on or about July 8, 2021 and is subject to certain conditions including, but not limited to, the receipt of all necessary approvals, including the approval of the TSX.
A prospectus supplement to the Company’s short form base shelf prospectus dated June 10, 2021 will be filed by no later than June 24, 2021 with the securities regulatory authorities in all provinces and territories of Canada. The securities being offered have not been and will not be registered under the United States Securities Act of 1933 and accordingly will not be offered, sold or delivered, directly or indirectly within the United States, its possessions and other areas subject to its jurisdiction or to, or for the account or for the benefit of, a U.S. person, except where an exemption from registration is available. This news release is for information purposes only and does not constitute an offer to sell or a solicitation of an offer to buy any securities of the Company in any jurisdiction.
The Company also announced concurrently with the offering that it has issued a notice of redemption to holders of the 5.45% Debentures, representing a redemption in full of all of the currently outstanding 5.45% Debentures. The Debentures will be redeemed on July 23, 2021 (the “Redemption Date”) in accordance with their terms. The 5.45% Debentures will be redeemed at a redemption price of $1,000 plus accrued and unpaid interest of $17.0219 up to but excluding the Redemption Date, both per $1,000 principal amount of 5.45% Debentures. As of the close of trading on June 21, 2021, the aggregate principal amount of the 5.45% Debentures outstanding was $46,000,000.
About Timbercreek Financial
Timbercreek Financial is a leading non-bank, commercial real estate lender providing shorter-duration, structured financing solutions to commercial real estate investors. Our sophisticated, service-oriented approach allows us to meet the needs of borrowers, including faster execution and more flexible terms that are not typically provided by Canadian financial institutions. By employing thorough underwriting, active management and strong governance, we are able to meet these needs while targeting strong risk-adjusted returns for investors.
This news release contains forward-looking statements about Timbercreek Financial, including, but not limited to, anticipated sales of the Debentures and the proposed use of proceeds from the offering. Forward-looking statements are typically identified by words such as “expect”, “anticipate”, “believe”, “foresee”, “could”, “intend”, “plan”, “seek”, “strive”, “will”, “may”, “potential” and “should” and similar expressions concerning matters that are not historical facts. By their nature, forward looking statements reflect the Company’s current views, beliefs, assumptions and intentions, and are subject to certain risks and uncertainties, known and unknown, including, without limitation, risks disclosed in the Company’s public filings. Many factors could cause actual results, performance or achievements to be materially different from any future results, performance or achievements that may be expressed or implied by these forward-looking statements. The Company does not intend to nor assumes any obligation to update these forward-looking statements whether as a result of new information, plans, events or otherwise, unless required by law.