THIS NEWS RELEASE IS NOT FOR DISTRIBUTION TO U.S.
NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES.
Atrium Mortgage Investment Corporation (TSX:AI) (TSX:AI.DB)
(TSX:AI.DB.A) (TSX:AI.DB.B) (TSX:AI.DB.C) (“Atrium”) announced
today that it has entered into an agreement with a syndicate of
underwriters bookrun by TD Securities Inc. and RBC Capital Markets
and co-led by CIBC Capital Markets, pursuant to which the
underwriters will purchase $25 million aggregate principal amount
of 5.50% convertible unsecured subordinated debentures of Atrium
due December 31, 2025 at a price of $1,000 per debenture.
Atrium has also granted to the underwriters an over-allotment
option to purchase up to an additional $3.75 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, to cover over-allotments. If the
over-allotment option is exercised in full, the gross proceeds of
the offering will total $28,750,000.
Atrium will use the net proceeds of the offering
to repay existing indebtedness under its revolving operating credit
facility, which will then be available to be drawn, as required,
for general corporate purposes, particularly funding future
mortgage loan opportunities.
The offering of debentures is expected to close
on or about July 18, 2018 and is subject to certain conditions
including, but not limited to, the receipt of all necessary
approvals, including the approval of the Toronto Stock
Exchange.
The debentures will mature on December 31, 2025
and will accrue interest at the rate of 5.50% per annum payable
semi-annually in arrears on June 30 and December 31 in each year,
commencing December 31, 2018. At the holder’s option, the
debentures may be converted into common shares of Atrium 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 fixed for redemption of the
debentures. The conversion price will be $15.60 for each common
share, subject to adjustment in certain circumstances.
The debentures will be direct, unsecured
obligations of Atrium, subordinated to other senior indebtedness of
Atrium, ranking pari-passu to Atrium’s existing 5.25% convertible
unsecured subordinated debentures due June 30, 2020, 6.25%
convertible unsecured subordinated debentures due March 31, 2019,
5.50% convertible unsecured subordinated debentures due September
30, 2021, and 5.30% convertible unsecured subordinated debentures
due June 30, 2024.
The debentures will not be redeemable before
December 31, 2021. On and after December 31, 2021 and prior to
December 31, 2023, the debentures may be redeemed, in whole or in
part, from time to time at Atrium’s option at par plus accrued and
unpaid interest, provided that the weighted average trading price
of the common shares of Atrium on the Toronto Stock Exchange 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 December
31, 2023, Atrium may, at its option, redeem the debentures, in
whole or in part, from time to time at par plus accrued and unpaid
interest.
Subject to specified conditions, Atrium will
have the right to repay the outstanding principal amount of the
debentures, on maturity or redemption, through the issuance of its
common shares. Atrium will also have the option to satisfy its
obligation to pay interest through the issuance and sale of its
common shares.
A prospectus supplement to Atrium’s short form
base shelf prospectus dated October 10, 2017 will be filed by no
later than July 11, 2018 with the securities regulatory authorities
in all provinces of Canada, except Québec. No securities regulatory
authority has either approved or disapproved of the contents of
this news release. The securities being offered have not been, and
will not be, registered under the United States Securities Act of
1933, as amended, or any state securities laws, and may not be
offered or sold in the United States unless 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 Atrium in any
jurisdiction.
About Atrium
Canada’s Premier Non-Bank
Lender™
Atrium is a non-bank provider of residential and
commercial mortgages that lends in major urban centres in Canada
where the stability and liquidity of real estate are high. Atrium’s
objectives are to provide its shareholders with stable and secure
dividends and preserve shareholders’ equity by lending within
conservative risk parameters.
Atrium is a Mortgage Investment Corporation
(MIC) as defined in the Income Tax Act (Canada), so is not taxed on
income provided that its taxable income is paid to its shareholders
in the form of dividends within 90 days after December 31 each
year. Such dividends are generally treated by shareholders as
interest income, so that each shareholder is in the same position
as if the mortgage investments made by the company had been made
directly by the shareholder. For further information, please refer
to regulatory filings available at www.sedar.com or Atrium’s
website at www.atriummic.com.
Forward-Looking Statements This
news release contains forward-looking statements. Much of this
information can be identified by words such as “expect to,”
“expected,” “will,” “estimated” or similar expressions suggesting
future outcomes or events and includes the expected use of proceeds
and the expected closing date of the offering. Atrium believes the
expectations reflected in such forward-looking statements are
reasonable but no assurance can be given that these expectations
will prove to be correct and such forward-looking statements should
not be unduly relied upon.
Forward-looking statements are based on current
information and expectations that involve a number of risks and
uncertainties, which could cause actual results or events to differ
materially from those anticipated. These risks include, but are not
limited to, risks associated with the ability to satisfy
regulatory, stock exchange and commercial closing conditions of the
offering, the uncertainty associated with accessing capital markets
and the risks related to Atrium’s business, including those
identified in Atrium’s annual information form for the year ended
December 31, 2017 under the heading “Risk Factors” (a copy of which
may be obtained at www.sedar.com). Forward-looking statements
contained in this news release are made as of the date hereof and
are subject to change. All forward-looking statements in this news
release are qualified by these cautionary statements. Except as
required by applicable law, Atrium undertakes no obligation to
update any forward-looking statement, whether as a result of new
information, future events or otherwise.
For further information, please
contact
Robert G.
Goodall |
Jennifer Scoffield |
President and Chief
Executive Officer |
Chief Financial
Officer |
(416) 867-1053info@atriummic.com
www.atriummic.com
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