Firm Capital Expands Financing with $20 Million Debenture Offering
Financing Milestone for Firm Capital Mortgage Investment Corporation
Firm Capital Mortgage Investment Corporation (TSX: FC) is excited to share news of a significant financial move that positions the company for growth and stability. The corporation has partnered with a group of underwriters, including CIBC Capital Markets and TD Securities, to secure $20 million in bought deal financing. This funding is designed to bolster Firm Capital's capacity for debt repayment and support general corporate purposes.
Details of the Convertible Debenture Offering
The financing revolves around the issuance of 5.50% convertible unsecured subordinated debentures. Each debenture is priced at $1,000, with a maturity date set for December 31, 2032. Investors could potentially increase their allocation by taking advantage of an over-allotment option for an additional $3 million in debentures, pushing the total gross proceeds to $23 million if fully exercised.
Benefits and Features of the Debentures
These debentures are not only a means of raising capital but also present an attractive investment opportunity. They will yield a 5.50% interest rate, with payments made semi-annually, starting from December 31, 2025. Moreover, they are convertible into common shares at a set conversion price of $14.06 per share, offering flexibility for investors looking to potentially capitalize on future growth.
Redemption and Conversion Options
Investors will find that the debentures cannot be redeemed before December 31, 2028. After this date, Firm Capital has the option to redeem them at par, as long as certain share price conditions are met. Specifically, redemption can only occur if the trading price of the shares exceeds 125% of the conversion price over a specified trading period. This structure ensures that the interests of both the corporation and its investors are aligned.
Strategic Use of Proceeds
The net proceeds from this offering will primarily fund debt repayment, contributing positively to the company's financial health. By reducing its debt load, Firm Capital aims to enhance shareholder value and ensure continued stable dividend distributions. This strategic focus on maintaining a sound balance sheet is essential for the corporation's long-term operational success.
Underwriting and Regulatory Compliance
The organization emphasizes that the closing of this financing is contingent upon obtaining necessary regulatory approvals. This step is crucial in adhering to compliance standards and ensuring that the offering proceeds smoothly.
Access to Financial Documents
Interested investors can access the relevant prospectus and other disclosure documents to stay informed about the offering. It is imperative to review these documents to fully understand the implications of the investment.
About Firm Capital Mortgage Investment Corporation
Firm Capital Mortgage Investment Corporation specializes in providing a wide array of real estate financing options. As a non-bank lender, it offers short-term bridge financing as well as conventional loans to residential and commercial entities. The company focuses on niche markets and seeks opportunities that are often overlooked by larger financial institutions. This targeted approach enables Firm Capital to deliver consistent returns to its shareholders while maintaining the safety of their investments.
Frequently Asked Questions
What is the purpose of Firm Capital's $20 million financing?
The financing will be used for debt repayment and to support general corporate purposes.
What is the interest rate on the convertible debentures?
The debentures offer a 5.50% interest rate, which will be paid semi-annually.
When do the convertible debentures mature?
The maturity date for the debentures is set for December 31, 2032.
Can shareholders convert their debentures into common shares?
Yes, debenture holders can convert their debentures into common shares at a conversion price of $14.06 per share.
Who underwrites the offering of the debentures?
The offering is being underwritten by a syndicate led by CIBC Capital Markets and TD Securities.
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