DF.PR.A : Semi-Annual Report 2019H1

Dividend 15 Split Corp. II has released its Semi-Annual Report to May 31, 2019.

Figures of interest are:

MER: “A separate base management expense ratio has been presented to reflect the normal operating expenses of the Company excluding any one time offering expenses. Management expense ratio is based on total expenses for the stated period and is expressed as an annualized percentage of average net asset value during the period.” The fund reports a figure of 1.04%

Average Net Assets: We need this to calculate portfolio yield. The Total Assets of the fund at fiscal year end was $234.4-million, compared to $241.6-million on May 31, so call it an average of $238.0-million. Preferred share dividends of $4,313,981 were paid over the half year at 0.525 p.a., implying average units outstanding 16.44-million, at an average NAVPU of (14.26 + 14.70)/2 = 14.48, implies net assets of $238.0-million. Say the Average Net Assets are the average of the two estimates, $238.0-million.

Underlying Portfolio Yield: Income received of $4,592,138 divided by average net assets of $238.0-million, multiplied by two because it’s semiannual is 3.86%.

Income Coverage: Net investment income of $3,351,881 (after expenses, before transaction costs, before capital gains) divided by preferred share dividends of $4,313,981 is 78%.

The income coverage calculated is a bit less than the DBRS calculation in May 2019:

The dividend coverage ratio was approximately 0.8x.

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