Brompton Group has announced:
The Manager is proposing that the new investment strategy be modelled after its successful Brompton VIP Income Fund (“VIP”), which is actively managed by MFC Global. VIP has generated compound total returns of approximately 15% per annum since inception of the fund in February 2002 to March 31, 2008 based on net asset value. During 2007, VIP generated an annual total return of 15.9% which compares favourably with the 6.6% total return attained by the S&P/TSX Income Trust Index over the same period. In order to address the potentially shrinking income trust sector, VIP’s investment universe will be broadened to include high dividend paying common shares, convertible debt instruments, preferred shares and other debt instruments.
…
In order to effect the change in investment strategy, unitholders of EWI, BWI, BTH, BTF and BDS will be given the opportunity to merge with VIP. These mergers will provide unitholders with the opportunity to hold an investment in a fund with an established track record of providing high total returns for unitholders, access to a top-ranked portfolio management team and an investment mandate that is designed to continue to meet investor objectives of income and growth. The fund will also have a large market capitalization and as such has the potential for increased liquidity and lower general and administration costs per unit. Unitholders of BSR, which is already actively managed by MFC Global, will also be given the opportunity to merge with VIP. This merger addresses the same uncertainty concerning the future of income trusts and it is expected to result in significantly lower costs for BSR unitholders, as the management fee will be reduced, and VIP’s larger fund size will provide the potential for lower general and administration costs per unit and increased liquidity. As part of the reorganization, it is anticipated that the preferred securities issued by BDS will be called for redemption in June 2008.
…
The special meetings of unitholders of the Funds have been called and will be held on June 9, 2008 for all Funds except BDS, which will have a special meeting date of July 2, 2008.
BDS.PR.A is not tracked by HIMIPref™. According to the prospectus:
In addition, the Preferred Securities may be called by the Trust prior to the Maturity Date, at a price which until May 31, 2005 will be equal to $10.40 and which will decline by $0.10 each year thereafter to $10.00 after May 31, 2008, plus any accrued and unpaid interest thereon.
It closed today on the TSX at 10.04-17, 9×3. It is currently rated Pfd-2 by DBRS, with a 6.0% coupon (as interest) and asset coverage of 2.3:1 as of the Dec. 31/07 financials.
[…] previous plan anticipated a forced […]