BBO.PR.A Gets Bigger

Claymore Investments has announced:

that Big Bank Big Oil Split Corp. (the “Company”) has completed its previously announced follow‐on offering (the “Offering”) of 1,546,550 preferred shares (the “Preferred Shares”) of the Company at a price of $10.20 per Preferred Share (of which 146,550 were sold pursuant to the exercise of the over‐allotment option) and 1,546,550 capital shares (the “Capital Shares”) of the Company at a price of $9.95 per Capital Share (of which 146,550 were sold pursuant to the exercise of the over‐allotment option) for total gross proceeds of $31,162,982.50 pursuant to a short form prospectus dated September 22, 2011.

The Capital Shares and Preferred Shares trade on the Toronto Stock Exchange under the symbols “BBO” and “BBO.PR.A” respectively. The Company invests in a portfolio (the “Portfolio”) of common shares of the six big Canadian banks and the ten biggest (by market capitalization) Canadian oil and gas companies utilizing a split share structure. The Company invests in the Portfolio on an equal‐weighted basis and provides a low fee exposure to the underlying sectors. The Preferred Shares are rated Pfd‐2 (low) by DBRS Ltd. The Company may write covered call options and cash covered put options on the Portfolio in order to generate additional returns.

The investment objectives for the Preferred Shares are: (i) to provide holders with fixed cumulative preferential quarterly cash distributions in the amount of $0.13125 per Preferred Share; and (ii) to return the original issue price of $10.00 per Preferred Share to holders on December 30, 2016. The investment objectives for the Capital Shares are: (i) to provide holders with regular monthly cash distributions, which are currently $0.09 per Capital Share; and (ii) to provide holders with the opportunity for growth in the net asset value per Capital Share.

The Offering was made on a best efforts agency basis in each of the provinces and territories in Canada through a syndicate of investment dealers co‐led by TD Securities Inc. and CIBC World Markets Inc. and including GMP Securities L.P., RBC Dominion Securities Inc., Scotia Capital Inc., BMO Nesbitt Burns Inc., National Bank Financial Inc., Canaccord Genuity Corp., HSBC Securities (Canada) Inc., Raymond James Ltd., Desjardins Securities Inc., Macquarie Private Wealth Inc., Dundee Securities Ltd., Mackie Research Capital Corporation, and Rothenberg Capital Management Inc.

The offering was discussed on PrefBlog in the post BBO.PR.A To Get Bigger Via Treasury Offering

The additional 1.5-million-odd shares basically doubles the size of the fund. BBO.PR.A is not currently tracked by HIMIPref™, but I’m going to have to start thinking about it!

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