Q: It appears from the news release that the rights dividend allows a holder to purchase a debenture. There is no indication of allowing and existing debenture holder to switch issues to a non redemptive issue.
This is exactly the way csu sold its original tranche of debentures.
It also states that this issues is an additional to the previously issued debs,ie no series 1 and 2
Am I missing something
Under the rights offering, the company will issue the rights in satisfaction of the rights dividend that will entitle the shareholders to buy up to $700 million of unsecured subordinated floating rate debentures, Series 1 of the company.
The Series 1 debentures will be issued as an additional tranche of, and will form a single series with, the outstanding $282.2 million of unsecured subordinated floating rate debentures, Series 1 of the company. There is no minimum principal amount of debentures that must be issuable upon the exercise of rights.
The company plans to use the net proceeds of the rights offering to pay down debt under its existing credit facility and use any remaining proceeds for future acquisitions.
The rights will be issued in satisfaction of the rights dividend in the amount of one right per common share.
The rights will be exercisable until 4:30 pm Toronto time on Sept. 29 at $133 per $100 principal amount of Series 1 debentures purchased, plus accrued interest in the amount of $0.217 per $100 principal amount of Series 1 debentures purchased on account of interest accrued on the Series 1 debentures from, and including, Sept. 30 to, but excluding the issue date.
This is exactly the way csu sold its original tranche of debentures.
It also states that this issues is an additional to the previously issued debs,ie no series 1 and 2
Am I missing something
Under the rights offering, the company will issue the rights in satisfaction of the rights dividend that will entitle the shareholders to buy up to $700 million of unsecured subordinated floating rate debentures, Series 1 of the company.
The Series 1 debentures will be issued as an additional tranche of, and will form a single series with, the outstanding $282.2 million of unsecured subordinated floating rate debentures, Series 1 of the company. There is no minimum principal amount of debentures that must be issuable upon the exercise of rights.
The company plans to use the net proceeds of the rights offering to pay down debt under its existing credit facility and use any remaining proceeds for future acquisitions.
The rights will be issued in satisfaction of the rights dividend in the amount of one right per common share.
The rights will be exercisable until 4:30 pm Toronto time on Sept. 29 at $133 per $100 principal amount of Series 1 debentures purchased, plus accrued interest in the amount of $0.217 per $100 principal amount of Series 1 debentures purchased on account of interest accrued on the Series 1 debentures from, and including, Sept. 30 to, but excluding the issue date.
5i Research Answer:
CSU is issuing rights AND warrants. The rights allow the purchase of debentures and the warrants allow the 'swap' of debentures.