TORONTO, May 6 (Reuters) - Loblaw Co L.TO, Canada’s largest supermarket chain, said on Wednesday it plans to raise C$350 million ($298 million) in medium-term notes and introduce a dividend reinvestment plan to raise C$300 million in equity.
Shares of the Toronto-based company rose more than 1 percent to C$35.80 after the news on Wednesday, a day after it reported a 73 percent surge in quarterly profit.
The company will offer the notes through a syndicate led by CIBC World Markets Inc and RBC Dominion Securities Inc.
The notes will pay a fixed rate of 4.85 percent until maturity on May 8, 2014. Loblaw will use proceeds to repay short term debt, refinance other indebtedness and for general corporate purposes, the company said in a release.
The reinvestment plan will enable shareholders to use dividends to buy additional common shares at a 3 percent discount to the average market price.
The country’s largest food distributor announced a 73 percent jump in quarterly profit on Tuesday, mostly due to inflated food prices and the tendency for recession-plagued Canadians to dine at home rather than at restaurants.
$1=$1.17 Canadian Reporting by Ashleigh Patterson