PrefBlog

R Split III Corp has announced:

The Company has revised its Capital Share dividend policy and has determined that it will not pay a dividend on the Capital Shares if the net asset value per Unit at the time of declaration, after giving effect to the dividend, would be less than or equal to the original issue price of the Preferred Shares. In such circumstance, any excess dividends received on the common shares of the Royal Bank of Canada (“Royal Bank Shares”) minus the dividends payable on the Preferred Shares and all administrative, operating and income tax expenses will be reinvested in short-term debt securities or Royal Bank Shares. However, as long as net asset value per Unit at the date of declaration exceeds such amount, the Company intends to pay a dividend on the Capital Shares equal to the excess of the dividends received on the Royal Bank Shares minus the Preferred Share dividends and all administrative, operating and income tax expenses.

The prior policy was:

It will be the policy of the Board of Directors to declare and pay quarterly dividends on the Capital Shares in an amount equal to the dividends received by the Company on the Royal Bank Shares minus the distributions payable on the Preferred Shares and all administrative and operating expenses.

Given that the asset coverage of the preferred shares is now 1.5-:1, the change has no immediate implications.

RBS.PR.A was last mentioned on PrefBlog when it was downgraded to Pfd-4(low) by DBRS. RBS.PR.A is not tracked by HIMIPref™.

This entry was posted on Friday, May 8th, 2009 at 10:18 am 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.