Toronto, ON. (February 1, 2011) – GMP Capital Inc. (“GMP”) (TSX: GMP) today announced
that it has entered into an agreement with a syndicate of underwriters led by National Bank
Financial Inc., GMP Securities L.P. and Scotia Capital Inc., acting as joint bookrunners, under
which the underwriters have agreed to purchase, on a bought-deal basis, 4,000,000
Cumulative 5-Year Rate Reset Preferred Shares, Series B (the “Series B Preferred Shares”) at
a price of $25.00 per share for aggregate gross proceeds to GMP of $100,000,000.
The Series B Preferred Shares will pay fixed cumulative dividends of $1.375 per share per
annum, yielding 5.50% per annum, payable quarterly on the last day of March, June,
September and December of each year, as and when declared by the Board of Directors of
GMP, for the initial five year period ending on March 31, 2016. Thereafter, the dividend rate
will be reset every five years at a rate equal to the sum of the then current five-year
Government of Canada bond yield plus 2.89%.
The Series B Preferred Shares will be redeemable in whole or in part by GMP, at its option, on
March 31, 2016, and on March 31 of every fifth year thereafter in accordance with their
terms, at a cash redemption price per share of $25.00 together with all accrued and unpaid
Holders of Series B Preferred Shares will have the right, at their option, to convert their
shares into Cumulative Floating Rate Preferred Shares, Series C (the "Series C Preferred
Shares"), subject to certain conditions and GMP’s right to redeem the Series B Preferred
Shares as described above, on March 31, 2016 and on March 31 of every fifth year thereafter.
Holders of the Series C Preferred Shares will be entitled to receive cumulative quarterly
floating dividends at a rate equal to the sum of the then 90-day Government of Canada
Treasury Bill yield plus 2.89%, as and when declared by the Board of Directors of GMP.
Holders of the Series C Preferred Shares may convert their Series C Preferred Shares into
Series B Preferred Shares, subject to certain conditions and GMP’s right to redeem the Series
C Preferred Shares as described below, on March 31, 2021 and on March 31 every five years
The Series C Preferred Shares will be redeemable in whole or in part by GMP, at its option, at
a cash redemption price per share of $25.00 together with all accrued and unpaid dividends in
the case of redemptions on March 31, 2021 and on March 31 every five years thereafter or
$25.50 together with all accrued and unpaid dividends in the case of redemptions on any
other date after March 31, 2016.
The Company has also granted the underwriters an option (the "Over-Allotment Option") to
purchase up to an additional 600,000 Series B Preferred Shares, on the same terms and
conditions as the offering, exercisable any time, in whole or in part, until the date that is 30
days from the closing date of the offering. If the Over-Allotment Option is exercised in full,
the total gross proceeds to GMP will be $115,000,000.
The net proceeds of the offering will be used by GMP for general corporate purposes, which
may include the reduction of indebtedness.
The Series B Preferred Shares will be offered for sale to the public in each of the provinces of
Canada pursuant to a short form prospectus to be filed with Canadian securities regulatory
authorities in all Canadian provinces.
DBRS Limited (“DBRS”) has assigned a provisional rating of Pfd-3 (low) for the Series B
The offering is scheduled to close on or about February 22, 2011, subject to certain
conditions, including Toronto Stock Exchange and other customary regulatory approvals, as
well as other conditions set forth in the underwriting agreement.
The Series B Preferred Shares have not been registered under the U.S. Securities Act of 1933,
as amended, 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 registration
requirements. This News Release does not constitute an offer to sell or the solicitation of an
offer to buy any security, and shall not constitute an offer, solicitation, or sale of the
securities in any state in which such offer, solicitation or sale would be unlawful.
GMP Capital Inc. carries on business through the following principal entities: GMP Securities
L.P., Griffiths McBurney Corp., GMP Securities Europe LLP, EdgeStone Capital Partners, L.P.
and GMP Investment Management L.P. GMP Capital Inc. also has a significant non-controlling
ownership interest in Richardson GMP Limited. The GMP Capital Inc. website is located at
gmpcapital.com. GMP Capital Inc. has offices in Toronto, Calgary, Montreal and London,
England. GMP Securities L.P. is a leading independent Canadian investment dealer focused on
investment banking and institutional equities for corporate clients and institutional investors.
GMP Securities L.P. can be found on the web at gmpsecurities.com. Griffiths McBurney Corp.
services institutional clients in the United States while GMP Securities Europe LLP provides
investment banking and institutional equity services to clients located in Europe. EdgeStone
Capital Partners, L.P. is a leading private equity firm, providing capital, strategic direction
and business and financial advice to help promising mid-market and early stage companies
achieve their full potential. EdgeStone Capital Partners, L.P. can be found on the web at
edgestone.com. GMP Investment Management L.P., through its private funds, seeks to
generate superior risk-adjusted investment returns over the long term by executing selected
investment strategies. GMP Investment Management L.P.’s offerings are aimed at both high3
net-worth individuals and institutional investors. Richardson GMP Limited is a full-service
investment firm, combining tradition and innovation to offer Canadian families and
entrepreneurs access to innovative wealth management and investment services delivered by
an experienced team of independent investment professionals. Richardson GMP Limited can
be found on the web at richardsongmp.com.
This press release contains “forward-looking statements” as defined under applicable
Canadian securities laws and additional forward-looking statements concerning anticipated
future events, results, circumstances, performance or expectations that are not historical
facts but instead represent management’s beliefs, expectations, estimates and projections
regarding future events, many of which, by their nature, are inherently uncertain and beyond
our control. These statements include, but are not limited to, statements made with respect
to management’s beliefs, plans, estimates, and intentions, and similar statements concerning
anticipated future events, results, circumstances, performance or expectations that are not
historical facts. Forward-looking statements generally can be identified by the use of
forward-looking terminology such as “outlook”, “objective”, “may”, “will”, “expect”,
“intend”, “estimate”, “anticipate”, “believe”, “should”, “plans” or “continue”, or similar
expressions suggesting future outcomes or events. Such forward-looking statements reflect
management’s current beliefs and are based on information currently available to
These statements are not guarantees of future performance and are subject to numerous risks
and uncertainties, including those described in this press release. GMP’s primary business
activities are both competitive and subject to various risks. These risks include market,
credit, liquidity, operational and legal and regulatory risks and other risk factors including,
without limitation, variations in the market value of securities, the volatility and liquidity of
equity trading markets, the volume of new financings and mergers and acquisitions,
competition in the marketplace for suitable investments, sustainability of fees, nature and
type of portfolio company investments, ability to realize carried interest entitlements and
dependence on key personnel. Other factors, such as general economic conditions, including
exchange rate fluctuations, may also have an effect on GMP’s results of operations. Many of
these risks and uncertainties can affect our actual results and could cause our actual results
to differ materially from those expressed or implied in any forward-looking statement made
by us or on our behalf. For a description of risks that could cause our actual results to
materially differ from our current expectations, please see the “Risk Management” section in
GMP’s 2009 Annual MD&A and “Risk Factors” in GMP’s annual information form dated March 1,
2010. Material assumptions or factors underlying the forward-looking statements contained in
this press release are set out in the “Business Environment and Market Outlook” section in the
2009 Annual MD&A, as updated in GMP’s Management’s Discussion and Analysis for the three
and nine months ended September 30, 2010 and include without limitation the impact of
recent capital market uncertainty in light of growing concerns over sovereign debt issues
within the European Union, increased equity market volatility, widening credit spreads, lower
demand for Canadian resources from less certain economic activity in China and other
emerging markets, and a weakening Canadian dollar relative to the United States dollar.
Although forward-looking information contained in this press release is based upon what
management believes are reasonable assumptions, there can be no assurance that actual
results will be consistent with these forward-looking statements. Certain statements included
in this press release may be considered a “financial outlook” for purposes of applicable
Canadian securities laws, and as such the financial outlook may not be appropriate for
purposes other than this press release. The forward-looking statements contained in this press
release are made as of the date of this press release, and should not be relied upon as
representing GMP’s views as of any date subsequent to the date of this press release.
For further information please contact:
GMP Capital Inc.
Rocco Colella, Director, Investor Relations
145 King Street West, Suite 300
Toronto, Ontario, M5H 1J8
Tel: (416) 941-0894; Fax: (416) 943-6175
email@example.com or firstname.lastname@example.org