Intact Financial Corporation Announces Medium Term Note Offerings and Anticipated Redemptions

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TORONTO, May 13, 2021 /CNW/ - Intact Financial Corporation (TSX: IFC) ("Intact" or the "Company") announced today that it intends to issue a minimum of $350 million aggregate principal amount of Series 11 unsecured medium term notes (the "Series 11 Notes"), a minimum of $350 million aggregate principal amount of Series 12 unsecured medium term notes (the "Series 12 Notes"), and a minimum of $200 million aggregate principal amount of Series 13 unsecured medium term notes (the "Series 13 Notes") (collectively, the "Notes"), subject to market conditions. The Notes will be direct unsecured obligations of Intact and will rank equally with all other unsecured and unsubordinated indebtedness of Intact.

The Series 11 Notes are expected to mature on May 21, 2024, the Series 12 Notes are expected to mature on May 18, 2028, and the Series 13 Notes are expected to mature on May 20, 2053. The Notes are being offered by way of private placement to accredited investors in Canada (the "Private Placement"). Intact intends to use the net proceeds from the Private Placement to fund the intended early redemption of the £350 million Senior 1.625 per cent notes due August 28, 2024 (the "RSA Senior Notes") issued by RSA Insurance Group plc ("RSA") after closing of Intact's previously announced proposed acquisition of the entire issued and to be issued share capital of RSA (the "Acquisition"), a transaction to be carried out by the Company together with Tryg A/S, and to fund the intended early redemption of Intact's $300 million Series 4 unsecured medium term notes due August 18, 2021 (the "Series 4 Notes"). A portion of the net proceeds may instead be used by Intact to fund a portion of the purchase price for the Acquisition in the event that certain regulatory approvals related to a portion of the previously announced equity investment in the Company by Caisse de dépôt et placement du Québec are not received prior to the closing of the Acquisition. If the net proceeds of the Private Placement are (i) insufficient to fully fund such redemptions, the Company currently intends to use available cash resources or undertake further financings to satisfy such shortfall or (ii) greater than the amount required by Intact as noted above, any such excess net proceeds will be used by it for general corporate purposes.  

Following closing of the Acquisition and the anticipated redemption of the RSA Senior Notes and the Series 4 Notes, the Company expects its debt-to-total-capital ratio to be below 26% as at June 30, 2021.

This announcement does not constitute a notice of redemption. If a decision is made to redeem the RSA Senior Notes and/or the Series 4 Notes, formal notice will be provided in accordance with the terms and conditions of the relevant securities.

The Notes, offered on a best efforts basis through a syndicate co-led by CIBC World Markets Inc., TD Securities Inc., and BMO Nesbitt Burns Inc., are expected to be issued on or about May 18, 2021. The closing of the Private Placement will be subject to certain customary conditions, including, but not limited to, the execution of an agency agreement with the syndicate.

If (i) closing of the Acquisition has not occurred prior to 11:59 p.m. (London UK local time) on December 31, 2021, or (ii) in certain circumstances where: (a) the scheme of arrangement for the Acquisition lapses or is withdrawn, or (b) if the Acquisition is implemented by way of a takeover offer, such takeover offer lapses, terminates or is withdrawn, then Intact will be required to redeem the Notes at a redemption price equal to 100% of the aggregate principal amount of the Notes, plus accrued and unpaid interest, if any, up to, but excluding, the date of redemption.

The closing of the Acquisition is expected to become effective on June 1, 2021, subject to the satisfaction or (where capable of waiver) waiver of the remaining conditions, including the High Court of Justice in England and Wales sanctioning the scheme of arrangement at the scheme court hearing, on May 25, 2021. Additional information on the Acquisition is available at Intact's website at https://www.intactfc.com/English/investors/.

The securities to be offered have not been and will not be registered under the U.S. Securities Act of 1933, as amended ("U.S. Securities Act"), and may not be offered or sold in the United States or to or for the account or benefit of U.S. persons absent registration or an applicable exemption from the registration requirements of the U.S. Securities Act. This press release shall not constitute an offer to sell or the solicitation of an offer to buy such securities in the United States or in any other jurisdiction where such offer is unlawful.

About Intact Financial Corporation

Intact Financial Corporation is the largest provider of property and casualty (P&C) insurance in Canada and a leading provider of specialty insurance in North America, with over $12 billion in total annual premiums. The Company has over 16,000 employees who serve more than five million personal, business and public sector clients through offices in Canada and the U.S.

In Canada, Intact distributes insurance under the Intact Insurance brand through a wide network of brokers, including its wholly-owned subsidiary BrokerLink, and directly to consumers through belairdirect. Intact Public Entities, a leading Canadian Managing General Agent (MGA), distributes public entity insurance programs including risk and claims management services in Canada.

In the U.S., Intact Insurance Specialty Solutions provides a range of specialty insurance products and services through independent agencies, regional and national brokers, wholesalers and managing general agencies. Products are underwritten by the insurance company subsidiaries of Intact Insurance Group USA, LLC.

Cautionary note regarding forward-looking statements and Non-IFRS Measures

Certain of the statements included in this press release about the Private Placement, including the minimum aggregate principal amounts of the Notes, the closing of the Private Placement, the expected maturity dates of the Notes and the expected use of the net proceeds of the Private Placement, and the Acquisition, including the closing thereof, or any other future events or developments, including the Company's expectations regarding its debt-to-total-capital ratio, constitute forward-looking statements. The words "may", "will", "would", "should", "could", "expects", "plans", "intends", "trends", "indications", "anticipates", "believes", "estimates", "predicts", "likely", "potential" or the negative or other variations of these words or other similar or comparable words or phrases, are intended to identify forward-looking statements. Unless otherwise indicated, all forward-looking statements in this press release are made as of May 13, 2021 and are subject to change after that date.

Forward-looking statements are based on estimates and assumptions made by management based on management's experience and perception of historical trends, current conditions and expected future developments, as well as other factors that management believes are appropriate in the circumstances. In addition to other estimates and assumptions which may be identified herein, estimates and assumptions have been made regarding, among other things, the anticipated closing of the Private Placement, the expected use of the net proceeds thereof and the receipt of the approval of the High Court of Justice in England and Wales of the Acquisition. However, the completion of the Private Placement and the Acquisition is each subject to customary closing conditions, termination rights and other risks and uncertainties, and there can be no assurance that the Private Placement and the Acquisition will be completed within anticipated timeframes or at all.

Certain of the forward-looking statements included in this press release may be considered "financial outlook" for purposes of applicable Canadian provincial and territorial securities laws. The purpose of including information relating to the expected future debt-to-total-capital ratio in this press release is to provide the reader with an indication of management's objectives and expectations, as of the date of this press release, regarding the Company's future performance. Readers are cautioned that this information may not be appropriate for other purposes.

All of the forward-looking statements included in this press release are qualified by these cautionary statements and those made in the section entitled Risk Management (Sections 28-33) of our MD&A for the year ended December 31, 2020, the section entitled Risk Management (Section 19) of our MD&A for the quarter ended March 31, 2021, and the section entitled Risk Factors - Risks Related to the Acquisition of our presentation entitled "Building a Leading P&C Insurer" dated November 18, 2020 and available on our website. These factors are not intended to represent a complete list of the factors that could affect the Company. These factors should, however, be considered carefully. Although the forward-looking statements are based upon what management believes to be reasonable assumptions, the Company cannot assure investors that actual results will be consistent with these forward-looking statements. Investors should not rely on forward-looking statements to make decisions, and investors should ensure the preceding information is carefully considered when reviewing forward-looking statements contained herein. The Company and management have no intention and undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

The Company uses both International Financial Reporting Standards (IFRS) and certain non-IFRS measures to assess performance. Non-IFRS measures, including debt-to-capital ratio, do not have any standardized meaning prescribed by IFRS and are unlikely to be comparable to any similar measures presented by other companies. The Company calculates debt-to-capital ratio by dividing total debt outstanding by the sum of total shareholders' equity and total debt outstanding, at the same date. Hybrid debt is excluded from debt outstanding and is instead included in the total financial leverage with preferred shares. Refer to Section 21 ? Non-IFRS financial measures in the Company's management's discussion and analysis for the three months ended March 31, 2021 for further details.

Disclaimer

This press release does not constitute or form part of any offer for sale or solicitation of any  offer to buy or subscribe for any securities nor shall it or any part of it form the basis of or be relied on in connection with, or act as any inducement to enter into, any contract or commitment whatsoever.

The information contained in this press release concerning the Company does not purport to be all-inclusive or to contain all the information that an investor may desire to have in evaluating whether or not to make an investment in the Company. The information is qualified entirely by reference to the Company's publicly disclosed information and the cautionary note regarding forward-looking statements included in this press release.

No representation or warranty, express or implied, is made or given by or on behalf of the Company or any of its the directors, officers or employees as to the accuracy, completeness or fairness of the information or opinions contained in this press release and no responsibility or liability is accepted by any person for such information or opinions. In furnishing this press release, the Company does not undertake or agree to any obligation to provide investors with access to any additional information or to update this press release or to correct any inaccuracies in, or omissions from, this press release that may become apparent. The information and opinions contained in this press release are provided as at the date of this press release. The contents of this press release are not to be construed as legal, financial or tax advice. Each investor should contact his, her or its own legal adviser, independent financial adviser or tax adviser for legal, financial or tax advice.

SOURCE Intact Financial Corporation