Bought Deal NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES/
VANCOUVER, British Columbia, March 21, 2022 (GLOBE NEWSWIRE) -- Diversified Royalty Corp. (TSX: DIV and DIV.DB) (the “Corporation” or “DIV”) is pleased to announce that it has entered into an agreement with a syndicate of underwriters led by CIBC Capital Markets, National Bank Financial Inc. and Scotiabank (the “Underwriters”) pursuant to which the Underwriters have agreed to purchase $52,500,000 aggregate principal amount of 6.00% convertible unsecured subordinated debentures (the “Debentures”) at a price of $1,000 per Debenture (the “Offering”).
In addition, the Corporation has granted the Underwriters an option (“Over-Allotment Option”) to purchase up to an additional $7,875,000 aggregate principal amount of Debentures at the offering price exercisable at any time up to 30 days following closing.
The Debentures will mature June 30, 2027 and will bear interest at an annual rate of 6.00% payable semi-annually in arrears on the last day of June and December in each year, commencing June 30, 2022. At the holder’s option, the Debentures may be converted into common shares of the Corporation (“Common Shares”) at any time prior to the close of business on the earlier of the last business day immediately preceding June 30, 2027 and the date fixed for redemption. The conversion price will be $4.05 per Common Share (the “Conversion Price”), subject to adjustment in certain circumstances.
The Debentures will not be redeemable on or before June 30, 2025. After June 30, 2025 and prior to June 30, 2026, the Debentures may be redeemed in whole or in part from time to time at DIV’s option, provided that the volume weighted average trading price of the Common Shares on the Toronto Stock Exchange (the “TSX”) during the 20 consecutive trading days ending on the fifth trading day preceding the date on which the notice of the redemption is given is not less than 125% of the Conversion Price. On or after June 30, 2026 and prior to the maturity date, DIV may, at its option, redeem the Debentures, in whole or in part, from time to time at par plus accrued and unpaid interest.
DIV intends to redeem (the “Redemption”) all of its outstanding convertible unsecured subordinated debentures due December 31, 2022 (the “2022 Debentures”) prior to December 31, 2022. The net proceeds of the Offering, together with other funds, are expected to be used towards the Redemption of the 2022 Debentures.
Closing of the Offering is expected to occur on or about March 30, 2022 and is subject to regulatory approval including that of the TSX.
The Debentures to be issued under the Offering will be offered by way of a prospectus supplement to the Corporation’s short form base shelf prospectus dated May 11, 2021 in each of the provinces of Canada, except Qubec, and may be offered in the United States on a private placement basis pursuant to an exemption from the registration requirements of the United States Securities Act of 1933, as amended (the “U.S. Securities Act”), and certain other jurisdictions.
This news release does not constitute an offer of securities for sale in the United States. The securities being offered have not been, nor will they be, registered under the U.S. Securities Act, and such securities may not be offered or sold within the United States absent U.S. registration or an applicable exemption from U.S. registration requirements.