TORONTO, Feb. 24, 2016 /CNW/ - First National Financial Corporation ("First National") (TSX: FN, TSX: FN.PR.A) today announced that it does not intend to exercise its right to redeem the currently outstanding 4,000,000 cumulative 5-year rate reset Class A Preference Shares, Series 1 of First National ("Series 1 Preference Shares") on March 31, 2016.
As a result, subject to certain conditions, the holders of Series 1 Preference Shares have the right to convert all or part of their Series 1 Preference Shares on a one-for-one basis into cumulative floating rate Class A Preference Shares, Series 2 of First National ("Series 2 Preference Shares") on March 31, 2016. Holders who do not exercise their right to convert their Series 1 Preference Shares into Series 2 Preference Shares on such date will retain their Series 1 Preference Shares.
The foregoing conversions are subject to the conditions that: (i) if First National determines that there would be less than 1,000,000 Series 1 Preference Shares outstanding on March 31, 2016, then all remaining Series 1 Preference Shares will automatically be converted into Series 2 Preference Shares on a one-for-one basis on March 31, 2016, and (ii) alternatively, if First National determines that there would be less than 1,000,000 Series 2 Preference Shares outstanding on March 31, 2016, no Series 1 Preference Shares will be converted into Series 2 Preference Shares. In either case, First National shall give a written notice to that effect to holders of Series 1 Preference Shares no later than March 24, 2016.
The dividend rate applicable to the Series 1 Preference Shares for the five-year period commencing on April 1, 2016, and ending on March 31, 2021, and the dividend rate applicable to the Series 2 Preference Shares for the three-month period commencing on April 1, 2016, and ending on June 30, 2016, will be determined in accordance with the terms of the respective classes of preference shares and announced by way of a news release on March 2, 2016.
Beneficial owners of Series 1 Preference Shares who wish to exercise their right of conversion should communicate as soon as possible with their broker or other nominee and ensure that they follow their instructions in order to ensure that they meet the deadline to exercise such right, which is 5:00 p.m. (Toronto time) on March 16, 2016.
About First National Financial Corporation
First National Financial Corporation (TSX: FN, TSX: FN.PR.A) is the parent company of First National Financial LP, a Canadian-based originator, underwriter and servicer of predominantly prime residential (single-family and multi-unit) and commercial mortgages. With more than $93 billion in mortgages under administration, First National is Canada's largest non-bank originator and underwriter of mortgages and is among the top three in market share in the mortgage broker distribution channel. For more information, please visit www.firstnational.ca.
Certain information included in this news release may constitute forward-looking information within the meaning of securities laws. In some cases, forward-looking information can be identified by the use of terms such as "may", "will, "should", "expect", "plan", "anticipate", "believe", "intend", "estimate", "predict", "potential", "continue" or other similar expressions concerning matters that are not historical facts. Forward-looking information may relate to management's future outlook and anticipated events or results, and may include statements or information regarding the future financial position, business strategy and strategic goals, product development activities, projected costs and capital expenditures, financial results, risk management strategies, hedging activities, geographic expansion, licensing plans, taxes and other plans and objectives of or involving the Company. Particularly, information regarding growth objectives, any future increase in mortgages under administration, future use of securitization vehicles, operation of the underwriting and fulfillment services business, industry trends and future revenues is forward-looking information. Forward-looking information is based on certain factors and assumptions regarding, among other things, interest rate changes and responses to such changes, the demand for institutionally placed and securitized mortgages, the status of the applicable regulatory regime and the use of mortgage brokers for single family residential mortgages. This forward-looking information should not be read as providing guarantees of future performance or results, and will not necessarily be an accurate indication of whether or not, or the times by which, those results will be achieved. While management considers these assumptions to be reasonable based on information currently available, they may prove to be incorrect. Forward looking-information is subject to certain factors, including risks and uncertainties listed under ''Risk and Uncertainties Affecting the Business'' in the MD&A, that could cause actual results to differ materially from what management currently expects. These factors include reliance on sources of funding, concentration of institutional investors, reliance on relationships with independent mortgage brokers and changes in the interest rate environment. This forward-looking information is as of the date of this release, and is subject to change after such date. However, management and First National disclaim any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required under applicable securities regulations.
SOURCE First National Financial Corporation
For further information: Robert Inglis, Chief Financial Officer, First National Financial Corporation, Tel: 416-593-1100, Email: firstname.lastname@example.org; Ernie Stapleton, President, Fundamental, Tel: 905-648-9354, Email: email@example.com