Atrium Mortgage Investment Corporation (TSX:AI, AI.DB.C, AI.DB.D,
AI.DB.E) (“Atrium”) announced today that it has entered into an
agreement with a syndicate of underwriters bookrun by TD Securities
Inc. and RBC Capital Markets, pursuant to which the underwriters
will purchase $30 million aggregate principal amount of 5.00%
convertible unsecured subordinated debentures of Atrium due
December 31, 2028 at a price of $1,000 per debenture. Atrium has
also granted to the underwriters an over-allotment option to
purchase up to an additional $4.5 million 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. If the over-allotment
option is exercised in full, the gross proceeds of the offering
will total $34,500,000.
Atrium will use the net proceeds of the offering
to repay existing indebtedness under its revolving operating credit
facility, which will then be available to be drawn, as required,
for general corporate purposes, particularly funding future
mortgage loan opportunities.
The offering of debentures is expected to close
on or about November 30, 2021 and is subject to certain conditions
including, but not limited to, the receipt of all necessary
approvals, including the approval of the Toronto Stock
Exchange.
The debentures will mature on December 31, 2028
and will accrue interest at the rate of 5.00% per annum payable
semi-annually in arrears on June 30 and December 31 in each year,
commencing June 30, 2022. At the holder’s option, the debentures
may be converted into common shares of Atrium at any time prior to
the close of business on the earlier of the business day
immediately preceding the maturity date and the business day
immediately preceding the date fixed for redemption of the
debentures. The conversion price will be $17.50 for each common
share, subject to adjustment in certain circumstances.
The debentures will be direct, unsecured
obligations of Atrium, subordinated to other senior indebtedness of
Atrium, ranking pari-passu to Atrium’s existing 5.30% convertible
unsecured subordinated debentures due June 30, 2024, 5.50%
convertible unsecured subordinated debentures due December 31,
2025, and 5.60% convertible unsecured subordinated debentures due
March 31, 2025.
The debentures will not be redeemable before
December 31, 2024. On and after December 31, 2024 and prior to
December 31, 2026, the debentures may be redeemed, in whole or in
part, from time to time at Atrium’s option at par plus accrued and
unpaid interest, provided that the weighted average trading price
of the common shares of Atrium on the Toronto Stock Exchange during
the 20 consecutive trading days ending on the fifth trading day
preceding the date on which notice of the redemption is given is
not less than 125% of the conversion price. On and after December
31, 2026, Atrium may, at its option, redeem the debentures, in
whole or in part, from time to time at par plus accrued and unpaid
interest.
Subject to specified conditions, Atrium will
have the right to repay the outstanding principal amount of the
debentures, on maturity or redemption, through the issuance of its
common shares. Atrium will also have the option to satisfy its
obligation to pay interest through the issuance and sale of its
common shares.
A prospectus supplement to Atrium’s short form
base shelf prospectus dated February 25, 2021 will be filed by no
later than November 18, 2021 with the securities regulatory
authorities in all provinces of Canada, except Québec. No
securities regulatory authority has either approved or disapproved
of the contents of this news release. The securities being offered
have not been, and will not be, registered under the United States
Securities Act of 1933, as amended, or any state securities laws,
and may not be offered or sold in the United States unless an
exemption from registration is available. This news release is for
information purposes only and does not constitute an offer to sell
or a solicitation of an offer to buy any securities of Atrium in
any jurisdiction.
About Atrium
Canada’s Premier Non-Bank
Lender™
Atrium is a non-bank provider of residential and
commercial mortgages that lends in major urban centres in Canada
where the stability and liquidity of real estate are high. Atrium’s
objectives are to provide its shareholders with stable and secure
dividends and preserve shareholders’ equity by lending within
conservative risk parameters.
Atrium is a Mortgage Investment Corporation
(MIC) as defined in the Income Tax Act (Canada), so is not taxed on
income provided that its taxable income is paid to its shareholders
in the form of dividends within 90 days after December 31 each
year. Such dividends are generally treated by shareholders as
interest income, so that each shareholder is in the same position
as if the mortgage investments made by the company had been made
directly by the shareholder. For further information, please refer
to regulatory filings available at www.sedar.com or Atrium’s
website at www.atriummic.com.
Forward-Looking Statements This
news release contains forward-looking statements. Much of this
information can be identified by words such as “expect to,”
“expected,” “will,” “estimated” or similar expressions suggesting
future outcomes or events and includes the expected use of proceeds
and the expected closing date of the offering. Atrium believes the
expectations reflected in such forward-looking statements are
reasonable but no assurance can be given that these expectations
will prove to be correct and such forward-looking statements should
not be unduly relied upon.
Forward-looking statements are based on current
information and expectations that involve a number of risks and
uncertainties, which could cause actual results or events to differ
materially from those anticipated. These risks include, but are not
limited to, risks associated with the ability to satisfy
regulatory, stock exchange and commercial closing conditions of the
offering, the uncertainty associated with accessing capital markets
and the risks related to Atrium’s business, including those
identified in Atrium’s annual information form for the year ended
December 31, 2020 under the heading “Risk Factors” (a copy of which
may be obtained at www.sedar.com). Forward-looking statements
contained in this news release are made as of the date hereof and
are subject to change. All forward-looking statements in this news
release are qualified by these cautionary statements. Except as
required by applicable law, Atrium undertakes no obligation to
update any forward-looking statement, whether as a result of new
information, future events or otherwise.
For further information, please
contact
Robert G. Goodall |
Jennifer Scoffield |
President and Chief Executive Officer |
Chief Financial Officer |
(416) 867-1053info@atriummic.com
www.atriummic.com
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