Fairfax Financial Holdings Ltd. has completed its previously announced offering of $400 million of 7.5% Senior Notes, the company said Tuesday.

The Senior Notes are due August 19, 2019, and were offered through a syndicate of dealers led by BMO Capital Markets and including CIBC World Markets, RBC Capital Markets, Scotia Capital, Bank of America Merrill Lynch, GMP Securities and Cormark Securities.

Net proceeds of the issue, after commissions and expenses of issue, are approximately $394.9 million, Fairfax said in a release.

“We are extremely grateful for the tremendous support shown across Canada for our first Canadian bond offering,” said Prem Watsa, chairman and CEO.

“As a result of this offering, we have increased the cash and marketable securities in our holding company to in excess of US$1 billion. These additional funds give us increased flexibility, including the ability to repay debt and other obligations from time to time. This Canadian dollar bond offering is also a natural economic hedge for our Canadian dollar assets, in particular our 100% interest in Northbridge Financial.”

The notes are unsecured obligations of Fairfax and pay a fixed rate of interest of 7.5% year annum.

Fairfax intends to use the net proceeds of the offering to augment its cash position, to increase short term investments and marketable securities held at the holding company level, to retire outstanding debt and other corporate obligations from time to time, and for general corporate purposes.

IE