PrefBlog

According to the original prospectus of July 2000:

It is not currently expected that holders of the Capital Shares will receive any dividends. If dividends on the Portfolio Shares exceed the amount of the fixed Preferred Share distributions and all expenses of the Company, the excess may be paid as dividends on the Capital Shares. In addition, if the Company realizes capital gains and would be liable to pay tax thereon, the Company may declare a capital gains dividend on the Capital Shares. Such dividend will minimize any tax payable by the Company and, as such, should benefit the Company and its shareholders. The Company expects to pay such dividend in Capital Shares rather than in cash. See ‘‘The Company – Distribution Policy’’.

In July 2006, following a refinancing of the preferred shares, the company announced:

In addition, the Board of Directors of the Company has declared a special dividend of $0.1290 per Capital Share payable on July 31, 2006 to holders of record at the close of business on July 28, 2006. The dividend on the Capital Shares represents the portfolio share dividends received in excess of the fixed Preferred Share dividends and forecasted expenses of the Company for its 2006 fiscal year.

… which was followed by regular quarterly dividends.

Today, the company announced:

Lifeco has determined to revise its Capital Share dividend policy so that to the extent the downside asset coverage on the Preferred Shares drops below 1.3 times at any time during the quarter, any excess of the dividends received on the underlying portfolio securities minus the distributions payable on the Preferred Shares and all administrative and operating expenses will be reinvested in short-term debt securities or underlying portfolio securities.

… which is good news for the preferred shareholders! According to the company, asset coverage on January 2 was 1.5-:1.

LSC.PR.C has been caught up in the latest DBRS Mass Review of Split Shares … I suspect that such a policy change was a requirement of keeping their rating … if, in fact, they keep it.

LSC.PR.C is not tracked by HIMIPref™.

This entry was posted on Thursday, January 8th, 2009 at 7:28 pm and is filed under Issue Comments. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.