Category: Issue Comments

Enbridge Inc. has announced (on January 30):

that it does not intend to exercise its right to redeem its currently outstanding Cumulative Redeemable Preference Shares, Series D (Series D Shares) (TSX: ENB.PR.D) on March 1, 2018. As a result, subject to certain conditions, the holders of the Series D Shares have the right to convert all or part of their Series D Shares on a one-for-one basis into Cumulative Redeemable Preference Shares, Series E of Enbridge (Series E Shares) on March 1, 2018. Holders who do not exercise their right to convert their Series D Shares into Series E Shares will retain their Series D Shares.

The foregoing conversion right is subject to the conditions that: (i) if Enbridge determines that there would be less than 1,000,000 Series D Shares outstanding after March 1, 2018, then all remaining Series D Shares will automatically be converted into Series E Shares on a one-for-one basis on March 1, 2018; and (ii) alternatively, if Enbridge determines that there would be less than 1,000,000 Series E Shares outstanding after March 1, 2018, no Series D Shares will be converted into Series E Shares. There are currently 18,000,000 Series D Shares outstanding.

With respect to any Series D Shares that remain outstanding after March 1, 2018, holders thereof will be entitled to receive quarterly fixed cumulative preferential cash dividends, as and when declared by the Board of Directors of Enbridge. The new annual dividend rate applicable to the Series D Shares for the five-year period commencing on March 1, 2018 to, but excluding, March 1, 2023 will be 4.46 percent, being equal to the five-year Government of Canada bond yield of 2.09 percent determined as of today plus 2.37 percent in accordance with the terms of the Series D Shares.

With respect to any Series E Shares that may be issued on March 1, 2018, holders thereof will be entitled to receive quarterly floating rate cumulative preferential cash dividends, as and when declared by the Board of Directors of Enbridge. The dividend rate applicable to the Series E Shares for the three-month floating rate period commencing on March 1, 2018 to, but excluding, June 1, 2018 will be 0.89984 percent, based on the annual rate on three month Government of Canada treasury bills for the most recent treasury bills auction of 1.20 percent plus 2.37 percent in accordance with the terms of the Series E Shares (the Floating Quarterly Dividend Rate). The Floating Quarterly Dividend Rate will be reset every quarter.

Beneficial holders of Series D Shares who wish to exercise their right of conversion during the conversion period, which runs from January 30, 2018 until 5:00 p.m. (EST) on February 14, 2018, should communicate as soon as possible with their broker or other intermediary for more information. It is recommended that this be done well in advance of the deadline in order to provide the broker or other intermediary time to complete the necessary steps. Any notices received after this deadline will not be valid.

ENB.PR.D is a FixedReset, 4.00%+237, that commenced trading 2011-11-23 after being announced 2011-11-14. It is tracked by HIMIPref™ but relegated to the Scraps subindex on credit concerns.

The most logical way to analyze the question of whether or not to convert is through the theory of Preferred Pairs, for which a calculator is available. Briefly, a Strong Pair is defined as a pair of securities that can be interconverted in the future (e.g., BAM.PR.Z and the FloatingReset BAM.PF.K that will exist if enough holders convert). Since they will be interconvertible on this future date, it may be assumed that they will be priced identically on this date (if they aren’t then holders will simply convert en masse to the higher-priced issue). And since they will be priced identically on a given date in the future, any current difference in price must be offset by expectations of an equal and opposite value of dividends to be received in the interim. And since the dividend rate on one element of the pair is both fixed and known, the implied average rate of the other, floating rate, instrument can be determined. Finally, we say, we may compare these average rates and take a view regarding the actual future course of that rate relative to the implied rate, which will provide us with guidance on which element of the pair is likely to outperform the other until the next interconversion date, at which time the process will be repeated.

We can show the break-even rates for each FixedReset / FloatingReset Strong Pair graphically by plotting the implied average 3-month bill rate against the next Exchange Date (which is the date to which the average will be calculated).

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The market appears to be relatively uninterested in floating rate product; most of the implied rates until the next interconversion are lower than the current 3-month bill rate and the averages for investment-grade and junk issues are slightly below current market rates, at +1.10% and +1.12%, respectively – although these break-even rates are much closer to the market rate than has been case for recent resets! Whatever might be the result of the next few Bank of Canada overnight rate decisions, I suggest that it is unlikely that the average rate over the next five years will be lower than current – but if you disagree, of course, you may interpret the data any way you like.

Since credit quality of each element of the pair is equal to the other element, it should not make any difference whether the pair examined is investment-grade or junk, although we might expect greater variation of implied rates between junk issues on grounds of lower liquidity, and this is just what we see.

If we plug in the current bid price of the ENB.PR.D FixedReset, we may construct the following table showing consistent prices for its soon-may-be-issued FloatingReset counterpart given a variety of Implied Breakeven yields consistent with issues currently trading:

Based on current market conditions, I suggest that the FloatingResets that will result from conversion are likely to be cheap and trading below the price of their FixedReset counterparts. Therefore, it seems likely that I will recommend that holders of ENB.PR.D continue to hold the issue and not to convert, but I will wait until it’s closer to the February 14 notification deadline before making a final pronouncement. I will note that once the FloatingResets commence trading (if, in fact, they do) it may be a good trade to swap the FixedReset for the FloatingReset in the market once both elements of each pair are trading and you can – presumably, according to this analysis – do it with a reasonably good take-out in price, rather than doing it through the company on a 1:1 basis. But that, of course, will depend on the prices at that time and your forecast for the path of policy rates over the next five years. There are no guarantees – my recommendation is based on the assumption that current market conditions with respect to the pairs will continue until the FloatingResets commence trading and that the relative pricing of the two new pairs will reflect these conditions.

DBRS has noted:

that Aimia Inc. (Aimia or the Company) has sold its Nectar loyalty program and related assets to J Sainsbury plc (Sainsbury’s) for approximately $105 million (the Transaction). As part of the Transaction, Aimia will send to Sainsbury’s (1) $183 million of cash to provide coverage against the Nectar redemption liability and (2) $96 million of working capital related to December redemptions. Aimia will use $100 million of the proceeds from the Transaction to repay amounts outstanding on its credit facility.

Aimia purchased the Nectar loyalty program in 2007 for approximately $755 million. Nectar is the largest component of Aimia’s International Coalitions Segment, which generated $550 million of gross billings for the last 12 months (LTM) ended September 30, 2017 (25% of the Company’s total), and $68 million of adjusted EBITDA for the LTM ended September 30, 2017 (29% of the Company’s total).
…
The Transaction weakens Aimia’s business risk profile because of its impact on the Company’s size and scale, geographic diversification and customer concentration risk. Pro forma the Transaction, DBRS believes the Company’s debt profile is more manageable as a result of the repayment of $100 million of debt to a total of $358 million (pro forma, at September 30, 2017) and the $395 million of cash on the balance sheet (pro forma, at September 30, 2017). While the relevance of the Company’s adjusted debt-to-adjusted EBITDA ratio has been substantially reduced, DBRS expects that, pro forma the Transaction, it will remain near 2.0 times, in line with historical levels.

To receive the required lenders’ consent to complete the Transaction, Aimia agreed to make amendments to its credit agreement. These include (1) the repayment of $100 million outstanding on the credit facility, (2) a reduction in the limit of the facility to $208 million from the previous $300 million, (3) a mandatory quarterly cash flow sweep equal to 50% of the prior quarter’s free cash flow, (4) tighter leverage covenants and restrictions around common and preferred dividend payments, (5) the replacement of the Deferred Redemption Reserve Fund with a minimum liquidity covenant and (6) the restriction of using proceeds from the credit facility to repay any Senior Secured Notes. DBRS notes that Aimia’s $250 million of Senior Secured Notes mature prior to the Company’s credit facility in May 2019, and that the Notes will have to be refinanced or repaid using cash, internally generated cash flow and/or the potential for further non-core asset sales.

DBRS will continue to monitor Aimia’s customer engagement, reward redemptions and the competitive environment on a quarter-by-quarter basis, with the next quarterly results to be released on February 14, 2018. Should mileage accumulation decrease and/or redemptions accelerate more than DBRS’ expectations, in the absence of new partnerships, divestitures and/or capital raises, a downgrade could result.

The common equity got whacked:

The parent company of loyalty card Aeroplan faced another brutal day on the Toronto Stock Market as its shares plummeted Friday after rating agency DBRS warned about a possible downgrade on the sale of its Nectar business at a substantial loss.

Shares of Aimia Inc. fell nearly 17 per cent to $2.31 in Friday trading on the Toronto Stock Exchange after losing 25 per cent on Thursday.

And preferred shareholders aren’t too happy either:

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DBRS downgraded the AIM preferreds to Pfd-5(high) in August 2017, following the suspension of preferred share dividends by the company and the subsequent downgrade to P-4(high) by S&P.

Affected issues are AIM.PR.A, AIM.PR.B and AIM.PR.C.

Standard & Poor’s has announced:

• •Toronto-based Thomson Reuters announced that it has signed a binding agreement to sell a 55% majority stake in its Financial & Risk (F&R) business, which accounts for more than half of its consolidated revenue and EBITDA, to Blackstone Group for about $17 billion.
• •The company will use most of the net proceeds to fund stock repurchases totaling $9 billion to $11 billion and repay $3 billion in debt.
• •We are placing our ratings on Thomson Reuters, including the ‘BBB+’ corporate credit rating, on CreditWatch negative.
• •The CreditWatch placement reflects the possible loss of the diversification benefits we believe support Thomson Reuters’ creditworthiness and the ‘BBB+’ rating. At this stage, it isn’t clear whether the debt repayment and the more focused, smaller and stable remaining business will fully offset the sale.

…
We aim to resolve the negative CreditWatch placement within 90 days after we review the transaction and speak with Thomson Reuters’ management. We will reassess our rating and our view on Thomson Reuters’ business strategy, operating costs, and financial position and policy. We will also examine whether the benefits of a smaller, and more stable and focused company will offset the loss of the diversification benefits we previously considered supportive of Thomson Reuters’ creditworthiness.

If we believe the sale does not have a material impact on our view of the business risk and expect its pro forma adjusted leverage will remain comfortably below 3x over the next two to three years, we would likely affirm the ratings. Alternatively, if our analysis indicates a deterioration in the company’s creditworthiness or if we expect it will sustain leverage above 3x, we could lower the rating by up to two notches.

S&P currently rates the preferreds at P-2(low), in contrast with the recently confirmed DBRS rating of Pfd-3(high) assigned via downgrade in 2013.

TRI.PR.B is tracked by HIMIPref™ but relegated to the Scraps subindex on credit concerns.

Artis Real Estate Investment Trust has announced:

that it closed its previously announced public offering, through a syndicate of underwriters led by TD Securities Inc., RBC Capital Markets and Scotiabank (collectively the “Underwriters”), on a bought deal basis, of 5,000,000 cumulative minimum rate reset preferred trust units, Series I (“Series I Units”) at a price of $25.00 per Series I Unit for gross proceeds of $125,000,000 (the “Financing”).

DBRS Limited has assigned a rating of Pfd-3 (low) to the Series I Units.

Artis intends to use the net proceeds from the Financing to redeem its existing U.S. dollar denominated cumulative redeemable preferred trust units, Series C and for general trust purposes.

AX.PR.I is a FixedReset, 6.00%+393M600, ROC issue announced 2018-01-22. It will be tracked by HIMIPref™ but will be relegated to the Scraps subindex on the basis of its Pfd-3(low) rating from DBRS.

The issue traded 419,647 shares today in a range of 24.90-99 before closing at 24.95-97. Vital statistics are:

Investors should note that according to the prospectus (see SEDAR and search for Artis Real Estate Investment Trust Jan 24 2018 15:21:01 ET Prospectus (non pricing) supplement – English PDF 606 K; I am not permitted to link to this public document on its public website directly, because the Canadian Securities Administrators don’t want you to bother your pretty little heads with things like “prospectuses” and the like. Just do what the nice man at the bank tells you is best. If he wasn’t wise and benevolent, he wouldn’t be working for a bank, would he now?) [emphasis added]:

The holders of Series I Units will have the right, at their option, to reclassify their Series I Units as Preferred Units, Series J (“Series J Units”) of Artis, subject to certain conditions, on April 30, 2023 and on April 30 every five years thereafter.
…
The CRA (as hereinafter defined) has expressed the preliminary view that the reclassification of the Series I Units and Series J Units would likely result in a taxable disposition at that time.

The tax consequences of reclassification are not necessarily a good or bad thing, although note that the fact that such reclassification is an option suggests the issue will be trading below par. It will depend on your Adjusted Cost Base and personal tax circumstances.

Thanks again to Assiduous Reader JB who originally brought this issue to my attention.

The new issue looks quite expensive to me, according to Implied Volatility Analysis:

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This perceived richness has a different source than the other issues discussed here recently, such as the BEP.PR.M issue, the CM.PR.S issue and the NA.PR.E, since the calculated level of Implied Volatility, 9%, is actually quite reasonable.

In this case, the richness is due to the extraordinarily high value that retail – fighting the last war, as always – has placed on the minimum reset guarantee. If, like me, you consider the guarantee to have little or no value, you will expect the new issue to be trading near the price of AX.PR.A, which has an Issue Reset Spread of 406bp (and a current coupon of 5.662%). However, this issue closed today at 23.50 bid, indicating that retail considers the minimum rate guarantee to be worth somewhere around $1.50. Wow! That’s many multiples of the value of the call option in this analysis!

p>Brompton Funds has announced:

Brompton Lifeco Split Corp. (the “Company”) is pleased to announce it is undertaking an overnight treasury offering of class A and preferred shares.

The class A shares will be offered at a price of $7.65 for a distribution rate of 11.8% on the issue price, and the preferred shares will be offered at a price of $10.05 for a yield to maturity of 5.4%. The closing price on the Toronto Stock Exchange (“TSX”) for each of the class A and preferred shares on January 24, 2018 was $7.83 and $10.32, respectively. The class A and preferred share offering prices were determined so as to be non-dilutive to the most recently calculated net asset value per unit of the Company prior to pricing, as adjusted for dividends and certain expenses to be accrued prior to or upon settlement of the offering.

The sales period of this overnight offering will end at 9:00 a.m. (ET) on January 26, 2018. The offering is expected to close on or about February 6, 2017 and is subject to certain closing conditions including approval by the TSX.
The Company invests in a portfolio of common shares of Canada’s four largest publicly-listed life insurance companies on an approximately equal weight basis: Great-West Lifeco Inc., Industrial Alliance Insurance and Financial Services Inc., Manulife Financial Corporation and Sun Life Financial Inc.

The investment objectives for the class A shares are to provide holders with regular monthly cash distributions targeted to be $0.075 per class A share and to provide the opportunity for growth in the net asset value per class A share.

The investment objectives for the preferred shares are to provide holders with fixed cumulative preferential quarterly cash distributions, currently in the amount of $0.14375 per preferred share, and to return the original issue price plus accrued dividends (if any) to holders of preferred shares on April 29, 2019.

The syndicate of agents for the offering is being led by RBC Capital Markets, CIBC Capital Markets, National Bank Financial Inc. and Scotiabank.

So the offering price for a Whole Unit is 17.70, against a NAVPU of 17.26 as of January 24. That’s a premium of 2.5% … not as much as we’ve seen on other recent deals, but still a pretty nice business!

Update, 2018-1-26: They raised $38.6-million. Not great, but not too shabby!

Brompton Lifeco Split Corp. (the “Company”) is pleased to announce a successful overnight treasury offering of class A and preferred shares. Gross proceeds of the offering are expected to be approximately $38.6 million. The offering is expected to close on or about February 6, 2018 and is subject to certain closing conditions including approval by the Toronto Stock Exchange (the “TSX”).

p>Brookfield Infrastructure hasn’t announced anything, but their new issue of BIP.PR.E settled today.

BIP.PR.E is a FixedReset, 5.00%+300M500, ROC, announced January 15. It will be tracked by HIMIPref™ and has been assigned to the FixedResets subindex on the basis of its P-2(low) rating from S&P (it is not rated by DBRS).

The issue traded 421,809 shares today in a range of 24.85-00 before closing at 24.93-95. Vital statistics are:

This issue looks quite expensive to me, according to Implied Volatility Analysis:

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We see in this chart many of the same features we saw when reviewing the recent new issues of NA.PR.E, BEP.PR.M and CM.PR.S:

• The curve is very steep, with Implied Volatility equal to 40% (a ridiculously large figure), and
• The prior issues are trading relatively near to, or well above par

The ludicrously high figure of Implied Volatility is something I take to mean that the underlying assumption of the Black-Scholes model, that of no directionality of prices, is not accepted by the market; the market seems to be taking the view that since things seem rosy now, they will always be rosy and everything will trade near par in the future.

I balk at ascribing a 100% probability to this outcome. There may still be a few old geezers amongst the Assiduous Readers of this blog who can still (faintly) remember the Great Bear Market of 2014-16, in which quite a few similar assumptions made earlier turned out to be slightly inaccurate.

For the long term, I suggest that any change in the slope of the curve will be a flattening, with a very high degree of confidence. This will imply that the higher-spread issues will outperform the lower-spread issues.

All told, though, I have no hesitation in slapping an ‘Expensive’ label on this issue – according to the Implied Volatility analysis shown above, the theoretical price of the new issue is 23.41, down from the announcement day estimate of 23.50 – and, remember, that is before making any adjustments for the ridiculously steep Implied Volatility calculation curve.

National Bank of Canada has announced:

that it has closed its domestic public offering of non-cumulative 5-year rate reset first preferred shares series 40 (non-viability contingent capital (NVCC)) (the “Series 40 Preferred Shares”). National Bank issued 12 million Series 40 Preferred Shares at a price of $25.00 per share to raise gross proceeds of $300 million.

The offering was underwritten by a syndicate led by National Bank Financial Inc.

The Series 40 Preferred Shares will commence trading on the Toronto Stock Exchange today under the ticker symbol NA.PR.E.

The Series 40 Preferred Shares were issued under a prospectus supplement dated January 15, 2018 to National Bank’s short form base shelf prospectus dated November 21, 2016.

NA.PR.E is a FixedReset, 4.60%+258, NVCC-Compliant, announced January 12. It will be tracked by HIMIPref™ and has been assigned to the FixedReset subindex.

The issue traded 357,595 shares today in a range of 24.77-89 before closing at 24.78-80. Vital statistics are:

This issue looks quite expensive to me, according to Implied Volatility Analysis:

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We see in this chart many of the same features we saw when reviewing the recent BPO new issue and BEP.PR.M and CM.PR.S:

• The curve is very steep, with Implied Volatility equal to 40% (a ridiculously large figure), and
• The extant issues are trading relatively near to, or well above par

The ludicrously high figure of Implied Volatility is something I take to mean that the underlying assumption of the Black-Scholes model, that of no directionality of prices, is not accepted by the market; the market seems to be taking the view that since things seem rosy now, they will always be rosy and everything will trade near par in the future.

I balk at ascribing a 100% probability to this outcome. There may still be a few old geezers amongst the Assiduous Readers of this blog who can still (faintly) remember the Great Bear Market of 2014-16, in which quite a few similar assumptions made earlier turned out to be slightly inaccurate.

For the long term, I suggest that any change in the slope of the curve will be a flattening, with a very high degree of confidence. This will imply that the higher-spread issues will outperform the lower-spread issues.

All told, though, I have no hesitation in slapping an ‘Expensive’ label on this issue – according to the Implied Volatility analysis shown above, the theoretical price of the new issue is 23.77, down sharply from the announcement day estimate of 24.01.

Canadian Imperial Bank of Commerce has announced:

that it has completed the offering of 18 million Basel III-compliant Non-cumulative Rate Reset Class A Preferred Shares Series 47 (Non-Viability Contingent Capital (NVCC)) (the “Series 47 Shares”) priced at $25.00 per share to raise gross proceeds of $450 million.

The offering was made through a syndicate of underwriters led by CIBC Capital Markets. The Series 47 Shares commence trading on the Toronto Stock Exchange today under the ticker symbol CM.PR.S.

The Series 47 Shares were issued under a prospectus supplement dated January 11, 2018, to CIBC’s short form base shelf prospectus dated March 16, 2016.

CIBC has designated the Series 47 Shares as eligible to participate in the CIBC Shareholder Investment Plan along with Series 41, 43 and 45. Holders of eligible shares may elect to have dividends on those preferred shares reinvested in common shares if they reside in Canada, or may elect stock dividends if they reside in the U.S. See “CIBC Shareholder Investment Plan” at www.cibc.com for more information.

The CIBC Shareholder Investment Plan – hard to find on their website! – is described here.

CM.PR.S is a FixedReset, 4.50%+245, NVCC-compliant, announced January 10. It will be tracked by HIMIPref™ and is assigned to the FixedReset subindex.

The issue traded 734,395 shares today in a range of 24.94-00 before closing at 24.96-97. Vital statistics are:

This issue looks quite expensive to me, but quantifying the degree of richness is difficult. According to Implied Volatility Analysis:

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Well, it’s starting to get monotonous, but we see in this chart many of the same features we saw when reviewing the recent BIP new issue as well as last week’s BEP.PR.M issue, the CM issue and NA issue:

• The curve is very steep, with Implied Volatility equal to 40% (a ridiculously large figure), and
• The extant issues are trading relatively near to par

The ludicrously high figure of Implied Volatility is something I take to mean that the underlying assumption of the Black-Scholes model, that of no directionality of prices, is not accepted by the market; in turn, I suggest that this reflects a rather touching faith that the existence of a minimum rate guarantee on reset also indicates that the issues will never, ever trade below par. There will be a lot of long faces when this test gets failed in the future! All it will take is a spread-widening, whether market-wide or company-specific.

However, for the long term, I suggest that any change in the slope of the curve will be a flattening, with a very high degree of confidence. This will imply that the higher-spread issues will outperform the lower-spread issues.

I cannot even begin to imagine what the buyers of this issue must have been thinking. For example, CM.PR.O is a FixedReset, 3.90%+232, that commenced trading 2014-6-11 after being announced 2014-6-2. It resets 2019-7-31. It closed today at 23.71, very close to the fair value calculated by the above analysis of 23.68. How in the name of God’s Green Earth can anybody reconcile the prices of these two issues? [Hint: Maybe the 3% stockbrokers’ selling commission has something to do with it.]

All told, though, I have no hesitation in slapping a ‘Very Expensive’ label on this issue. According to the analysis illustrated by the above chart, the fair price is 23.94.

Quadravest has announced:

Dividend 15 Split Corp. (the “Company”) is pleased to announce it has filed a preliminary short form prospectus in each of the provinces of Canada with respect to an offering of Preferred Shares and Class A Shares of the Company. The offering will be co-led by National Bank Financial Inc., CIBC World Markets Inc., Scotia Capital Inc. and RBC Capital Markets, and will also include TD Securities Inc., BMO Capital Markets, Canaccord Genuity Corp., Industrial Alliance Securities Inc., Echelon Wealth Partners, GMP Securities L.P., Raymond James Ltd., Desjardins Securities Inc., Mackie Research Capital Corporation, and Manulife Securities Incorporated.

The Preferred Shares will be offered at a price of $10.00 per Preferred Share to yield 5.25% and the Class A Shares will be offered at a price of $10.90 per Class A Share to yield 11.01%.

The closing price on the TSX of each of the Preferred Shares and the Class A Shares on January 15, 2018 was $10.28 and $10.94, respectively.

Since inception of the Company, the aggregate dividends paid on the Preferred Shares have been $7.24 per share and the aggregate dividends paid on the Class A Shares have been $20.00 per share (including five special distributions of $0.25 per share, one special distribution of $0.50 per share and one special stock dividend of $1.75 per share), for a combined total of $27.24 per unit. All distributions to date have been made in tax advantage eligible Canadian dividends or capital gains dividends.

The net proceeds of the offering will be used by the Company to invest in an actively managed, high quality portfolio
consisting of 15 dividend yielding Canadian companies as follows:

Bank of Montreal	Enbridge Inc.	TELUS Corporation
The Bank of Nova Scotia	Manulife Financial Corp.	Thomson-Reuters Corporation
BCE Inc.	National Bank of Canada	The Toronto-Dominion Bank
Canadian Imperial Bank of Commerce	Royal Bank of Canada	TransAlta Corporation
CI Financial Corp.	Sun Life Financial Inc.	TransCanada Corporation

The Company’s investment objectives are:
Preferred Shares:
i. to provide holders of the Preferred Shares with fixed, cumulative preferential monthly cash dividends in the
amount of 5.25% annually; and
ii. on or about the termination date, currently December 1, 2019 (subject to further 5 year extensions thereafter), to pay the holders of the Preferred Shares $10.00 per Preferred Share.

Class A Shares:
i. to provide holders of the Class A Shares with regular monthly cash dividends currently targeted to be $0.10 per share; and
ii. on or about the termination date, currently December 1, 2019 (subject to further 5 year extensions thereafter) to
pay holders of Class A Shares at least the original issue price of those shares.

The sales period of this overnight offering will end at 9:00 a.m. EST on January 17, 2018. The offering is expected to close on or about January 30, 2018 and is subject to certain closing conditions including approval by the TSX.

So new Whole Units are being sold for 20.90, against a NAVPU of 19.44 as of December 29, 2017, a premium of 7.5%, ignoring valuation changes since year-end. What a great business! If I had better contacts in the underwriting community, I’d start a Split Share Fund with the underlying investment being CryptoCurrencies.

Update, 2018-1-17 Wow! They raised over $100-million!

Dividend 15 Split Corp. (the “Company”) is pleased to announce it has completed the overnight marketing of up to 4,971,000 Preferred Shares and up to 4,971,000 Class A Shares of the Company. Total proceeds of the offering are expected to be approximately $103.9 million.