NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES.
KINGSTON, Ontario, Nov. 01, 2017 (GLOBE NEWSWIRE) -- The Empire Life Insurance Company (“Empire Life”) (TSX:EML.PR.A) and E-L Financial Corporation Limited (“E-L Financial”) (TSX:ELF) today announced that Empire Life has issued $100 million of Non-Cumulative Rate Reset Preferred Shares, Series 3 (the “Series 3 Preferred Shares”) to its parent, E-L Financial on a private placement basis. Empire Life issued to E-L Financial 4,000,000 Series 3 Preferred Shares at an issue price of $25 per share to raise gross proceeds of $100 million.
E-L Financial will be entitled to receive fixed non-cumulative quarterly dividends yielding 4.90% annually, as and when declared by the Board of Directors of Empire Life, for the initial period ending on January 17, 2023. Thereafter, the dividend rate will be reset every five years at a rate equal to the 5-year Government of Canada bond yield plus plus 3.24%.
E-L Financial will have the right, at its option, to convert its shares into Non-Cumulative Floating Rate Preferred Shares, Series 4 (“Series 4 Preferred Shares”), subject to certain conditions, on January 17, 2023 and on January 17 every five years thereafter. E-L Financial will be entitled to receive non-cumulative quarterly floating dividends, as and when declared by the Board of Directors of Empire Life, at a rate equal to the three-month Government of Canada Treasury Bill yield plus 3.24%.
Empire Life intends to use the net proceeds from the offering for regulatory capital and general corporate purposes.
The offering closed today, November 1, 2017.
On a pro forma basis, after giving effect to the preferred share issue, the Company estimates that, as at September 30, 2017, its MCCSR would have increased from 274% to 291%.
“This is a very positive development for both companies,” said Duncan Jackman, Chairman of the Boards of E-L Financial and Empire Life,”It’s a very good investment opportunity for E-L Financial and it allows Empire Life to strengthen an already solid capital base while continuing to meet the insurance and wealth management needs of Canadians.”
About Empire Life
Empire Life is a subsidiary of E-L Financial Corporation Limited. Since 1923, Empire Life has provided individual and group life and health insurance, investment and retirement products to Canadians. The company’s mission is to make it simple, fast and easy for Canadians to get the investment, insurance and group benefits coverage they need to build wealth, generate income and achieve financial security. As of September 30, 2017 Empire Life had total assets under management of $16.8 billion. Follow Empire Life on Twitter @EmpireLife or visit www.empire.ca for more information.
About E-L Financial Corporation Limited
E-L Financial operates as an investment and insurance holding company. In managing its operations, E-L Financial distinguishes between two operating segments, E-L Corporate and Empire Life. E-L Corporate represents investments in stocks and fixed income securities held directly and indirectly through pooled funds, closed-end investment companies and other investment companies. The investment strategy is to accumulate shareholder value through long-term capital appreciation and dividend income from its investments.
E-L Financial Corporation Limited
Richard Carty
Vice-President and General Counsel
416 350-7742
cartyr@e-lfinancial.com