FirstService sells US$70 million in debentures convertible into 2.5M shares
Published Wednesday October 21st, 2009
TORONTO - Property services provider FirstService Corp. (TSX:FSV) says a syndicate of underwriters has agreed to buy up to US$70 million in convertible debentures.
The underwriters, led by TD Securities and Scotia Capital, have also been granted the option to buy an additional US$7 million in debentures.
The debentures will mature at the end of 2014 and will have an annual interest rate of 6.5 per cent. They may be converted into subordinate voting shares of FirstService for US$28 per share.
Fully converted, the debenture financing will lead to the issue of 2.5 million new subordinate voting shares. FirstService has about 28 million shares outstanding, meaning the deal will have an 8.9 per cent dilution effect.
FirstService said it will use the money raised for general corporate purposes and to repay existing debt under its credit line with banks.
Shares in the company lost 22 cents to $20.71 in Wednesday trading on the Toronto Stock Exchange.
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