Virtus Investment Partners Amends Credit Facility, Issues Call Notice for 9,783 Preferred Shares
HARTFORD, Conn., Aug. 2 /PRNewswire-FirstCall/ -- Virtus Investment Partners, Inc. (Nasdaq: VRTS), which operates a multi-manager asset management business, today announced it has taken actions to enhance its long-term capital position by amending its credit facility and issuing a notice to call 9,783 shares of its outstanding Series B Convertible Preferred Stock.
Virtus amended the terms of its existing $30.0 million credit facility to extend the maturity and provide more favorable interest rates and more flexible debt covenants. The amended facility extends the term of the original credit agreement to September 2013 and sets a maximum available credit limit of $30.0 million for the full term, subject to certain conditions. Under the original agreement, the current maximum available credit limit of $30.0 million would have declined to $18.0 million on September 1, 2010. The company currently has $15.0 million outstanding on the facility.
The agreement also provides the facility with a lower variable interest rate that is tied to standard benchmark rates, and revises certain debt covenants on terms that provide additional operating flexibility. BNY Mellon, as lead arranger and administrative agent, together with PNC Bank, National Association, constitute the lending group.
The company also announced that it has issued notice to exercise its right to call a portion of the Series B Convertible Preferred Stock held by Harris Bankcorp Inc., a subsidiary of Bank of Montreal. The convertible preferred stock, which has an 8 percent cumulative dividend, is owned by Harris under the terms of its $45.0 million investment in Virtus.
Under the terms of the investment agreement, Virtus has the right to call 9,783 of the 45,000 shares of outstanding preferred stock at a call price of $1,000 per preferred share, plus any unpaid accrued dividends. Harris, at its option, may convert the preferred shares into approximately 375,000 shares of common stock, representing a conversion price of $26.10 per share.
"Our improved financial results over the past year gave us the opportunity to restructure and extend the credit facility and provided the financial flexibility to exercise our option to call a portion of the preferred shares," said George R. Aylward, Virtus' president and chief executive officer. He noted that the exercise of the call provision, which was driven primarily by financial considerations including a $0.8 million reduction in annual preferred dividend payments, does not change Harris's board representation or other governance rights.
"These decisions will result in a lower-cost and more efficient capital structure, and give us the elements of a flexible, long-range capital management profile that is appropriate for a company of our size and in our industry," Aylward added.
About Virtus Investment Partners
Virtus Investment Partners (Nasdaq: VRTS) is a distinctive partnership of boutique investment managers singularly committed to the long-term success of individual and institutional investors. The company provides investment management products and services through its affiliated managers and select subadvisers, each with a distinct investment style, autonomous investment process and individual brand. Virtus Investment Partners offers access to a variety of investment styles across multiple disciplines to meet a wide array of investor needs. Additional information can be found at www.virtus.com.
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SOURCE Virtus Investment Partners, Inc.