On June 8, 2010, The Consumers' Waterheater Income Fund (TSX: CWI.UN) closed its previously announced public offering of a combination of 5,210,000 fund units at C$4.80 per unit for gross proceeds of approximately C$25 million and C$25 million principal amount of 6.25% convertible unsecured subordinated debentures due June 30, 2017, for aggregate gross proceeds of approximately C$50 million.
The units and debentures were underwritten by a syndicate of underwriters led by TD Securities Inc. The Fund has also granted the underwriters an over-allotment option, exercisable in whole or in part at any time up to 30 days following closing, pursuant to which the underwriters may purchase up to an additional 781,500 units and C$3.75 million principal amount of debentures, on the same terms. If the over-allotment option is exercised in full, the gross proceeds from the offering will be approximately C$57.5 million. Each debenture is convertible into units at the option of the holder at a conversion price of C$6.48 (or 154.3210 units per C$1,000 principal amount of debentures).
The net proceeds of the offering will be used for general purposes of the Fund, which may include, among other things, paying down amounts on The Consumers' Waterheater Operating Trust's revolving line of credit, repaying certain amounts of secured debt assumed by the Fund in connection with its purchase of Stratacon Inc. in August 2008, and funding the purchase of possible future acquisitions.
The Consumers' Waterheater Income Fund owns a portfolio of 1.4 million installed water heaters and other assets, leased primarily to residential customers in Ontario.