Geulph, Ont.-based Co-operators General Insurance Co. has entered into an agreement with Scotia Capital Inc. and TD Securities Inc. on behalf of a syndicate of underwriters, pursuant to which the underwriters have agreed to buy, on a bought deal basis, four million Non-Cumulative Five-Year Rate Reset Class E Preference Shares, Series D from Co-operators General for sale to the public.

The shares being offered will sell for a price of $25 each for aggregate gross proceeds of $100 million. The expected closing date of the offering is May 22.

Co-operators has granted the underwriters an over-allotment option to purchase an additional 600,000 Series D preference shares at the same offering price. If the underwriters’ over-allotment option is exercised in full, the total gross proceeds of the Series D preference share offering will be $115 million.

The Series D preference shares will yield 7.25% per annum, payable quarterly, as and when declared by the company’s board of directors, for an initial period ending June 30, 2014. That day — and on June 30 every five years thereafter — the dividend rate will reset to be equal to the then current five-year Government of Canada bond yield plus 5.21%.

Holders of the Series D preference shares will have the right to convert their shares into Non-Cumulative Floating Rate Class E Preference Shares, Series E, subject to certain conditions and the company’s right to redeem the Series D preference shares, on June 30, 2014 and on June 30 every five years thereafter. Holders of the Series E Preference Shares will be entitled to receive a quarterly floating rate dividend, as and when declared by Co-operators’ board of directors, equal to the then current three-month Government of Canada Treasury Bill yield plus 5.21%.

Holders of the Series E preference shares may convert their Series E preference shares into Series D preference shares, subject to certain conditions and the company’s right to redeem the Series E preference shares on June 30, 2019 and on June 30 every five years thereafter.

The Series D preference shares will not be redeemable prior to June 30, 2014. On June 30, 2014 and on June 30 every five years thereafter, the company may, subject to certain conditions, redeem all or any part of the Series D preference shares at a cash redemption price per share of $25 along with all declared and unpaid dividends. The company may redeem all or any part of the Series E preference shares at a cash redemption price per share of $25 in the case of redemptions on June 30, 2019 and on June 30 every five years thereafter or $25.50 in the case of redemptions on any other date after June 30, 2014, together, in each case, with all declared and unpaid dividends to, but excluding, the redemption date.

The Series D preference shares will be issued under a short form prospectus filed in all provinces. Net proceeds of this issue will be used for general corporate purposes.

The Series D preference shares have not been and will not be registered in the U.S. under the Securities Act of 1933, as amended, and may not be offered, sold or delivered in the U.S. absent registration or applicable exemption from the registration requirements of such Act.