Fairfax preferreds now C$230 million after partial greenshoe exercise

New York, March 3 – Fairfax Financial Holdings Ltd. said the underwriters of its recent offering of series M preferred shares exercised C$30 million of the C$50 million greenshoe, raising the amount sold to C$230 million.

Fairfax priced the original C$200 million on Feb. 20, selling 8 million shares at the liquidation preference of C$25.00 per share.

With the over-allotment option, Fairfax sold 9.2 million preferred shares.

The preferreds have a 4.75% annual dividend for the initial period ending March 31, 2020.

BMO Nesbitt Burns Inc., RBC Dominion Securities Inc. and Scotia Capital Inc. were the lead managers.

The dividend rate will reset every five years at the then five-year Government of Canada bond yield plus 398 basis points.

Series M holders will have the right to convert their shares into series N preferred stock on March 31, 2020 and on March 31 every five years thereafter. Series N preferred shareholders will be entitled to receive cumulative quarterly floating dividends at a rate equal to the then current three-month Government of Canada treasury bill yield plus 398 bps.

The offering was held in conjunction with a notes deal and a subordinate voting shares offering.

Fairfax Financial plans to use the proceeds to help fund its acquisition of Brit plc.

If the acquisition is not completed, Fairfax intends to use the proceeds to augment its cash position, increase short-term investments and marketable securities held at the holding company level, to refinance or retire outstanding debt and other corporate obligations of Fairfax and its subsidiaries and for general corporate purposes.

The Toronto-based financial services holding company owns property and casualty insurance and reinsurance and investment management subsidiaries.

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