Faircourt Asset Management has announced:
that 164,456 Combined Units (consisting of one Trust Unit and one Preferred Security) and 1,399,639 Trust Units (without matching Preferred Securities) were submitted for redemption on May 31, 2011. Securityholders who tendered Combined Units for redemption will be entitled to receive $17.3310 per Combined Unit, which is equal to $7.3173, being the Net Asset Value per Trust Unit calculated using a three day volume weighted average price for exchange-traded securities held by the Trust, determined as of June 30, 2011 less costs of funding the redemption, including commissions, plus the $10.00 principal amount of the Preferred Security, plus all accrued and unpaid interest thereon to but excluding July 8, 2011 (the “Payment Date”). Securityholders who submitted unmatched Trust Units will receive $7.3173 per Trust Unit. Payment in respect of the redemptions of Combined Units and unmatched Trust Units will be made in full on the Payment Date.
The Manager also announced that effective June 30, 2011, NAV per Trust Unit has been reduced by $0.21 as a result of a corporate action involving one of the Trust’s investments having been improperly reflected in the NAV.
Faircourt Split Trust is an odd beast among Split Share Corporations because the number of preferred shares outstanding is not set equal to the number of capital shares. The unmatched retraction of 1,399,639 Trust Units represents over one-quarter of the 5,302,037 Trust Units outstanding on 2010-12-31.
The Asset Coverage on 2010-12-31 was about 1.57:1; applying the May 31 retraction on a pro-forma basis as of that date results in a pro-forma Asset Coverage of about 1.42:1.
FCS.PR.B was last mentioned on PrefBlog when it was exchanged from FCS.PR.A. FCS.PR.B is tracked by HIMIPref™, but is relegated to the Scraps index on credit concerns.
[…] The size of the preferred share redemption exactly counterbalances the unmatched Capital Unit retraction discussed on PrefBlog in the post FCS.PR.B Credit Quality to Deteriorate. […]
[…] coverage for this issue has been a continuing matter of interest, with an unmatched retraction of capital units on June 30 being followed by a a matching redemption of preferred securities shortly afterwards. As with many […]