Exchange Income closes $600-million note offering

Executive Summary

• Exchange Income Corp. has closed a $600 million private placement of 4.324% senior unsecured notes due March 13, 2031.
• The offering was rated BBB (low) with a stable trend by Morningstar DBRS and was materially oversubscribed.
• Net proceeds will be used to repay existing indebtedness under credit facilities and for general corporate purposes, aiming to reduce leverage to 15-year lows.

Key Details

• Transaction Size: $600 million aggregate principal amount.
• Instrument: 4.324% senior unsecured notes due March 13, 2031.
• Offering Type: Private placement in each of the provinces of Canada, relying on exemptions from prospectus requirements.
• Credit Rating: Final rating of BBB (low) with a stable trend by Morningstar DBRS.
• Use of Proceeds: Repayment of existing indebtedness under the corporation's credit facilities and for general corporate purposes.
• Strategic Impact:
  • Replaces previously redeemed convertible debentures.
  • Modernizes the balance sheet with fixed-rate capital.
  • Maintains pro forma aggregate leverage ratio at 15-year lows.
  • Provides liquidity for organic growth or acquisitions.
• Market Reception: The offering was materially oversubscribed.
• Advisors: Joint lead agents and active bookrunners included RBC Capital Markets, CIBC Capital Markets, and National Bank Capital Markets.

Notable Quotes

• Mike Pyle, CEO: "We are excited to have completed our inaugural transaction within the Canadian investment-grade bond market... The offering was materially oversubscribed, and the ability to complete the offering during a time of economic turbulence is a testament to the EIC's resilience and business model."
• Richard Wowryk, CFO: "The addition of investment grade bonds into our capital structure modernizes our balance sheet to reflect our size and provides us with fixed rate capital to replace the previously redeemed convertible debentures. The net proceeds of the offering will reduce our credit facility debt, maintaining our pro forma aggregate leverage ratio at 15-year lows."