LBS.PR.A : Semi-Annual Report, 2018

Brompton’s Life & Banc Split Corp has released its Semi-Annual Report, 2018 in August.

Figures of interest are:

MER: “The MER per unit, excluding Preferred share distributions and issue costs (which were covered by the portfolio’s dividend income), was 0.93% for the first six months of 2018, down from 0.95% for 2017.”

Average Net Assets: We need this to calculate portfolio yield. The Total Assets of the fund at year end was $453.8-million, compared to $413.2-million on June 30, so call it an average of $433.5-million. Preferred share dividends of $5,271,068 were paid over the half year at 0.475 p.a. (boosted to 0.545 after the recent term extension), implying average units outstanding 22.2-million, at an average NAVPU of (20.06 + 18.62)/2 = 19.34, implies net assets of $429.3-million. Say the Average Net Assets are the average of the two estimates, $431.4-million.

Underlying Portfolio Yield: Income received of $8,114,588 divided by average net assets of $431.4-million, multiplied by two because it’s semiannual is 3.76%.

Income Coverage: Net investment income of $6,131,229 (before capital gains) divided by preferred share dividends of $5,271,068 is a very good 116%.

The income coverage calculated is fairly close to “The dividend coverage ratio was about 1.0x.” calculated by DBRS in November 2018.

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