Western Financial Group Announces Convertible Debenture Financing
High River, Alberta, April 2, 2009 (TSX-WES, WES.PR.A, WES.PR.B) - Western Financial Group Inc. ("the Company") is pleased to announce that it has retained a syndicate of agents led by TD Securities Inc. to conduct a "best efforts" private placement of up to $30 million of convertible unsecured subordinated debentures (the "Debentures"). Net proceeds from the financing will be used to increase ownership of certain strategic investments and for general corporate purposes.
The Debentures, which are unsecured and subordinated to senior indebtedness of the Company, will bear a coupon of 12%, payable semi-annually in arrears, and will mature on June 30, 2014. The Debentures will be convertible by the holder into common shares of the Company at a conversion price of $3.00 per common share, subject to adjustment.
The private placement is expected to close on or about April 21, 2009.
Assuming the deal reaches its maximum size, together with the Company’s existing long term debt, we will increase debt to equity levels up to 35%, which is in line with our stated long term targets. The Company has recently completed a transaction to fix $30 million of its senior long term debt at 4.3% for five years. Therefore, successful completion of the maximum offering will provide the Company with more than two-thirds of its long term debt at a blended annual fixed rate of 8.15% for the next five years.
Western Financial Group is a leader in providing insurance, financial and banking services to more than 500,000 individuals and businesses in over 100 communities across Western Canada through its WFG Agency Network locations, affiliated insurance brokers, Western Life Assurance Company and Bank West.
The common shares of Western Financial Group are traded on the Toronto Stock Exchange under the symbol "WES".
For more information on Western Financial Group, please visit www.westernfinancialgroup.ca, or contact:
Jodi Greig, Investor Relations
Western Financial Group
(403) 652-2663
This press release is not for distribution to any United States news service or otherwise in the United States.
Forward-Looking Information
This press release contains information that constitutes "forward-looking information" or "forward-looking statements" (collectively "forward-looking information") within the meaning of applicable securities legislation. This forward-looking information includes, among others, statements regarding: the timing of completion of the private placement and the resulting expected debt to equity ratio and blended interest rate on long term debt of the Company and other expectations, beliefs, plans, goals, objectives, assumptions, information and statements about possible future events.
This forward looking information is based on various assumptions, including without limitation, the ability to complete the private placement and the size of the private placement. Undue reliance should not be placed on forward-looking information. Forward-looking information is based on current expectations, estimates and projections that involve a number of risks which could cause actual results to vary and in some instances to differ materially from those anticipated by the Company and described in the forward-looking information contained in this press release. The material risk factors include, but are not limited to, uncertainties as to changes in capital markets and the abilities of the parties to complete the transaction generally.
Forward-looking information is based on the estimates and opinions of the Company’s management at the time the information is presented. The Company assumes no obligation to update forward-looking information should circumstances or management’s estimates or opinions change, except as required by law.
The Debentures have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold within the United States unless registered under the U.S. Securities Act and applicable state securities laws or unless an exemption from such registration is available.
