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Press release from Marketwire

Exchange Income Corporation Announces $35,000,000 Financing of 5.75% Convertible Senior Secured Debentures

Tuesday, December 14, 2010

Exchange Income Corporation Announces $35,000,000 Financing of 5.75% Convertible Senior Secured Debentures15:18 EST Tuesday, December 14, 2010WINNIPEG, MANITOBA--(Marketwire - Dec. 14, 2010) -NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES. ANY FAILURE TO COMPLY WITH THIS RESTRICTION MAY CONSTITUTE A VIOLATION OF U.S. SECURITIES LAW.Exchange Income Corporation (TSX:EIF) (the "Corporation") announced today that it has reached an agreement with a syndicate of underwriters co-led by National Bank Financial Inc. and TD Securities Inc., and including CIBC World Markets Inc., Wellington West Capital Inc., Raymond James Ltd., Laurentian Bank Securities Inc. and PI Financial Corp. (the "Underwriters"), pursuant to which the Corporation will issue on a "bought-deal" basis, subject to regulatory approval, $35,000,000 aggregate principal amount of convertible senior secured debentures (the "Debentures") at a price of $1,000 per principal amount of Debentures (the "Offering"). The Corporation has granted to the Underwriters an over-allotment option to purchase up to an additional $5,250,000 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. The Corporation intends to use the net proceeds from the Offering to reduce indebtedness and for general corporate purposes.The Debentures will bear interest from each date of issue at 5.75% per annum, payable semi-annually in arrears on January 31 and July 31 each year commencing July 31, 2011. The Debentures will each have a maturity date of January 31, 2016 (the "Maturity Date").The Debentures will be convertible at the holder's option at any time prior to the close of business on the earlier of the Maturity Date and the business day immediately preceding the date specified by the Corporation for redemption of the Debentures into common shares of the Corporation ("Common Shares") at a conversion price of approximately $26.00 per Common Share, being a conversion rate of 38.4615 Common Shares for each $1,000 principal amount of Debentures. Closing of the Offering is expected to occur on or about January 11, 2011. The Offering is subject to normal regulatory approvals, including approval of the Toronto Stock Exchange of the listing of the Debentures and the Common Shares to be issued upon conversion of the Debentures. The Debentures will be offered in each of the provinces of Canada other than the province of Quebec by way of a short form prospectus, and by way of private placement in the United States to Qualified Institutional Buyers pursuant to Rule 144A. About Exchange Income Corporation Exchange Income Corporation is a diversified, acquisition-oriented corporation, focused on opportunities in the industrial products and transportation sectors which are ideally suited for public markets except for their size. The strategy of the Corporation is to invest in profitable, well-established companies with strong cash flows operating in niche markets in Canada and/or the United States.The Corporation is currently operating in two niche business segments: aviation and specialty manufacturing. The aviation segment consists of Perimeter Aviation LP., Keewatin Air LP and Calm Air International LP and the specialty manufacturing segment consists of Jasper Tank Ltd., Overlanders Manufacturing LP, Water Blast Manufacturing LP, and Stainless Fabrication, Inc. For more information on Exchange Income Corporation, please visit www.exchangeincomecorp.ca.Additional information relating to the Corporation, including all public filings, is available on SEDAR (www.sedar.com). Caution Concerning Forward-Looking Statements The statements contained in this news release that are forward-looking are based on current expectations and are subject to a number of uncertainties and risks, and actual results may differ materially. These uncertainties and risks include, but are not limited to, the dependence of the Corporation on the operations and assets currently owned by it, the degree to which its subsidiaries are leveraged, the fact that cash distributions are not guaranteed and will fluctuate with the Corporation's financial performance, dilution, restrictions on potential future growth, competitive pressures (including price competition), changes in market activity, the cyclicality of the industries, seasonality of the businesses, poor weather conditions, and foreign currency fluctuations, legal proceedings, commodity prices and raw material exposure, dependence on key personnel, and environmental, health and safety and other regulatory requirements. Further information about these and other risks and uncertainties can be found in the disclosure documents filed by Exchange Income Corporation with the securities regulatory authorities, available at www.sedar.com. FOR FURTHER INFORMATION PLEASE CONTACT: Mike PyleExchange Income CorporationPresident & CEO(204) 982-1850mpyle@eig.cawww.exchangeincomecorp.caORJoe RacanelliThe Equicom Group Inc.Investor Relations(416) 815-0700 Ext. 243jracanelli@equicomgroup.comThe Toronto Stock Exchange has neither approved nor disapproved the contents of this press release.