BSD.PR.A Redeemed

Great news! One of the most execrable, poorly managed split share corporations in Canada is now defunct!

Soundvest Capital Management Ltd. announced (on 2019-5-2):

that it has reached an agreement with Bristol Gate Capital Partners Inc. (“Bristol Gate”) pursuant to which Bristol Gate has agreed to acquire the rights to the management agreement governing the Soundvest Split Trust (the “Fund”) (the “Proposed Transaction”).

In connection with the Proposed Transaction, Soundvest has agreed to hold a meeting of holders of the preferred securities of the Fund (the “Preferred Securities”) and capital units of the Fund (the “Capital Units”) at which (i) holders of the Preferred Securities will be asked to consider and, if deemed advisable, to approve amendments to the Trust Indenture dated March 16, 2005 (as amended) governing the Preferred Securities to change the Maturity Date (as defined in the Trust Indenture) of the Preferred Securities to a day prior to closing of the Proposed Transaction, and (ii) holders of the Capital Units will be asked to consider and, if deemed advisable, to approve amendments to the amended and restated Declaration of Trust of the Fund dated as of April 30, 2010, as amended March 16, 2015 and March 31, 2015, to change the attributes of the Capital Units to provide that the Fund may redeem all of the outstanding Capital Units, other than Bristol Gate’s Capital Units, on a date following the Maturity Date and prior to the closing of the Proposed Transaction (the “Redemption Date”) for an amount per Capital Unit equal to the net asset value per Capital Unit on the Redemption Date (the “Pre-Closing Changes”). It is a condition to the closing of the Proposed Transaction that the Fund complete the repayment and cancellation of the Preferred Securities on such new Maturity Date and redeem all of the outstanding Capital Units, other than Capital Units held by Bristol Gate or its related parties, on the Redemption Date in accordance with the Pre-Closing Changes.

In addition to the approval of the Pre-Closing Changes, holders of Preferred Securities and Capital Units (collectively, the “Unitholders”) will be asked to consider and, if deemed advisable, to approve the change of manager at the special meetings. Details about the changes will be contained in the meeting materials to be mailed to the Unitholders.

Soundvest will refer the Proposed Transaction to the Independent Review Committee (the “IRC”) of the Fund, which acts in an advisory capacity representing the interests of the Fund and Unitholders with respect to conflict of interest matters. The IRC will be asked to review the Proposed Transaction and determine that, if implemented, the Proposed Transaction would achieve a fair and reasonable result for the Fund.

The Proposed Transaction is subject to customary regulatory approvals. Closing will occur two business days after all securityholder and regulatory approvals have been obtained, which is currently targeted for late June 2019.

… and the OSC has produced its paperwork (on 2019-6-20):

(the Jurisdiction)




(the Fund)


(the Filer)


(Bristol Gate)


The Principal Regulator is satisfied that the decision meets the test set out in the Legislation for the Principal Regulator to make the decision.

The decision of the Principal Regulator under the Legislation is that the Approval Sought is granted, provided that the Filer obtains the prior approval of securityholders of the Fund for the Change of Manager.

They later announced (on 2019-6-25):

Soundvest Capital Management Ltd. (the “Manager” or “Soundvest”) today held the special meeting (the “Meeting”) of the holders (“Securityholders”) of preferred securities (“Preferred Securities”) and the holders (“Unitholders”) of capital units (“Capital Units”) of Soundvest Split Trust (the “Fund”).

On May 2, 2019, Soundvest announced that it and Bristol Gate Capital Partners Inc. (“Bristol Gate”) had reached an agreement for Bristol Gate to acquire from Soundvest the management agreement and investment advisory agreement governing the Fund that will result in Bristol Gate becoming the investment fund manager and portfolio manager of the Fund (the “Proposed Transaction”).

At the Meeting, Unitholders and Securityholders approved the Proposed Transaction and the applicable amendments to the Trust Indenture and the Declaration of Trust which provide that the Preferred Securities will mature on July 3, 2019 and all of the outstanding Capital Units, other than the Capital Units beneficially owned by Bristol Gate and its related parties, will be redeemed on July 3, 2019.

Upon closing of the Proposed Transaction (the “Closing”), the only issued and outstanding Capital Units will be those held by Bristol Gate and its related parties. As a result, the board of directors of Soundvest, as manager of the Fund, has determined to voluntarily delist the Capital Units from the TSX on July 3, 2019. Soundvest will not be seeking the approval of holders of Capital Units for the delisting of the Capital Units, as the Proposed Transaction constitutes a near term liquidity event for Unitholders, for which all material conditions will have been satisfied and the likelihood of non-completion is remote.

Closing is expected to occur on July 5, 2019, subject to satisfaction of all closing conditions, including receipt of all required securities regulatory and stock exchange approvals.

… and the trust indenture (see SEDAR and search for “Soundvest Split Trust Jun 26 2019 16:13:52 ET Other securityholders documents – English PDF 11 K”; I regret that the Canadian Securities Administrators do not permit the public to link directly to these public documents) has been modified:

NOW THEREFORE it is hereby covenanted, agreed and declared as follows:
1. The definition of “Maturity Date” in Section 1.1 of the Trust Indenture is hereby deleted
and substituted with the following:
“ “Maturity Date” shall mean July 3, 2019.”

BSD.PR.A was last mentioned on PrefBlog when the name was changed in March, 2019. The term was extended in March, 2015 to March 31, 2020. The manager has been severely criticized on PrefBlog for suspending redemptions during the Credit Crunch and requiring notice of retraction exercise before the right to retract even existed.

Good riddance to bad rubbish.

Update, 2019-9-12: DBRS discontinues rating:

DBRS Limited (DBRS) discontinued the rating on the Preferred Securities issued by Soundvest Split Trust as they were fully repaid on July 3, 2019.

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