FTN.PR.A Semi-Annual Report 2015

Financial 15 Split Corp has released its Semi-Annual Report to May 31, 2015.

Figures of interest are:

MER: 1.25% of the whole unit value, “presented to reflect the normal operating expenses of the Company
excluding any one time secondary offering expenses.”

Average Net Assets: We need this to calculate portfolio yield. The Total Assets of the fund at year end was $259.1-million, compared to $287.3-million on May 31, so call it an average of $273.2-million. Preferred share dividends of $4,336,167 were paid over the half year at 0.525 p.a., implying average units outstanding 16.52-million, at an average NAVPU of (17.39 + 17.77)/2 = 17.58, implies $290.4-million. Say the Average Net Assets are the average of the two estimates, $281.8-million.

Underlying Portfolio Yield: Income received of $4,007,070 divided by average net assets of $281.8-million, multiplied by two because it’s semiannual is 2.84%.

Income Coverage: Net investment income of $2,047,004 (before capital gains) divided by preferred share dividends of $4,336,167 is a very low 47%.

The Income Coverage is significantly higher than the calculation performed from the 2014 Annual Report of 33%. There was a secondary offering in 14H2 and another one in 15H1, so it’s fairly difficult to derive precise numbers from the financial statements.

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