Exchange Income to redeem seven-year 5.25% debentures

Executive Summary

• Exchange Income Corp. has announced the early redemption of all outstanding 7-year 5.25% convertible unsecured subordinated debentures due January 15, 2029, effective December 2, 2025.
• The redemption is triggered because the market price of the company's common shares has exceeded 125% of the debenture conversion price ($60), allowing the company to call the debt under the trust indenture.
• Holders who do not convert their debentures into common shares prior to the redemption date will receive a cash payment of $1,020.1369863 per debenture, comprising the $1,000 principal plus accrued interest.

Key Details

• Instrument: 7-year 5.25% convertible unsecured subordinated debentures due Jan. 15, 2029.
• Redemption Date: Effective December 2, 2025.
• Total Outstanding Principal: $114,798,000 (representing 114,798 debentures at $1,000 each).
• Conversion Price: $60 per share.
• Redemption Trigger: Common share price exceeded 125% of the conversion price ($60).
• Cash Settlement for Non-Converted Debentures: Holders will receive $1,020.1369863 per debenture, consisting of:
  • Principal repayment: $1,000
  • Accrued interest: $20.1369863 (calculated for the 140-day period from July 15, 2025, to the redemption date).
• Interest Cessation: All interest on the debentures ceases from and after the redemption date.
• Tender Instructions: Certificates must be tendered to the indenture trustee, Computershare Advantage Trust of Canada, in Toronto.

Notable Quotes

• "The corporation is taking the step to redeem these debentures as the current market price of Exchange Income's common shares is greater than 125 per cent of the conversion price of the debentures of $60, which permits the corporation to redeem the debentures in accordance with the trust indenture."