PrefBlog

Brompton Funds Limited has announced (on 2021-4-26):

that Sustainable Power & Infrastructure Split Corp. (the “Company”) has filed a preliminary prospectus dated March 31, 2021 in respect of an initial public offering of class A shares and preferred shares (the “Preliminary Prospectus”).

The Company will invest in a globally diversified and actively managed portfolio (the “Portfolio”) consisting primarily of dividend-paying securities of power and infrastructure companies, whose assets, products and services the Manager believes are facilitating the multi-decade transition toward decarbonization and environmental sustainability. The Portfolio will include investments in companies operating in the areas of renewable power, green transportation, energy efficiency, and communications, among others (“Sustainable Power and Infrastructure Companies”). In seeking to achieve its investment objectives, the Company intends to target investments in Sustainable Power and Infrastructure Companies that have positive and/or improving environmental, social and governance (“ESG”) characteristics as identified by the Manager.

The class A shares will be offered at a price of $10.00 per share. The investment objectives for the class A shares are to provide holders with regular monthly non-cumulative cash distributions and the opportunity for capital appreciation through exposure to the Portfolio. The monthly cash distribution is targeted to be $0.06667 per class A share representing a yield on the issue price of the class A shares of 8.0% per annum.

The preferred shares will be offered at a price of $10.00 per share. The investment objectives for the preferred shares are to provide holders with fixed cumulative preferential quarterly cash distributions and to return the original issue price of $10.00 to holders on May 29, 2026, subject to extension for successive terms of up to five years as determined by the board of directors of the Company. The quarterly cash distribution will be $0.1250 per preferred share ($0.50 per annum, or 5.0% per annum on the issue price of $10.00 per preferred share), until May 29, 2026. The preferred shares have been provisionally rated Pfd-3 by DBRS Limited.

Prospective purchasers investing in the Company will have the option of paying for shares in cash or paying for class A shares or units by an exchange of freely-tradable listed securities of any eligible issuers listed in the Preliminary Prospectus (the “Exchange Option”). Prospective purchasers who utilize the Exchange Option are required to deposit their securities of exchange eligible issuers by no later than 5:00 p.m. (Toronto time) on April 22, 2021 through CDS. Please contact your investment advisor or refer to the Preliminary Prospectus for detailed information on how to participate in the offering by way of either cash purchase or the exchange option.

The syndicate of agents for the offering is being led by RBC Capital Markets, CIBC Capital Markets, National Bank Financial Inc. and Scotiabank and includes BMO Capital Markets, TD Securities Inc., Hampton Securities Limited, Canaccord Genuity Corp., Raymond James Ltd., Richardson Wealth Limited, Echelon Wealth Partners Inc., iA Private Wealth Inc., Mackie Research Capital Corporation and Manulife Securities Incorporated.

The offering went well:

Brompton Funds Limited (the “Manager”) is pleased to announce that Sustainable Power & Infrastructure Split Corp. (the “Company”) has completed its initial public offering of 3,221,666 Class A Shares and 3,221,666 Preferred Shares for total gross proceeds of $64.4 million. The Class A Shares and Preferred Shares will commence trading today on the Toronto Stock Exchange under the symbols PWI and PWI.PR.A, respectively.

Important extracts from the prospectus include:

The investment objectives for the Preferred Shares are to provide their holders with fixed cumulative preferential quarterly cash distributions and to return the original issue price of $10.00 to holders on May 29, 2026 (the “Maturity Date”), subject to extension for successive terms of up to five years as determined by the board of directors of the Company.
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The Preferred Shares have been provisionally rated Pfd-3 by DBRS Limited. See “Description of the Securities — Rating of the Preferred Shares”
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Holders of record of Preferred Shares on the last Business Day of each of March, June, September and December will be entitled to receive fixed cumulative preferential quarterly cash distributions equal to $0.1250 per Preferred Share until May 29, 2026. On an annualized basis, this would represent a yield on the Preferred Share offering price of approximately 5.0%. Such quarterly distributions are expected to be paid by the Company on or
before the tenth Business Day of the month following the period in respect of which the distribution was payable. The first distribution will be pro-rated to reflect the period from the Closing Date to June 30, 2021. Based on the expected Closing Date (defined herein), the initial distribution will be $0.05632 per Preferred Share and is expected to be payable to the holders of Preferred Shares of record on June 30, 2021.
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Preferred Shares may be surrendered at any time for retraction to TSX Trust Company (the “Registrar and Transfer Agent”), the Company’s registrar and transfer agent, but will be retracted only on the second last Business Day of a month (the “Retraction Date”). Preferred Shares surrendered for retraction by 5:00 p.m. (Toronto time) on the tenth Business Day prior to the Retraction Date will be retracted on such Retraction Date and the holder will be paid on or before the tenth Business Day of the following month (the “Retraction Payment Date”). Holders of Preferred Shares whose Preferred Shares are surrendered for retraction will be entitled to receive a retraction price per Preferred Share equal to 96% of the lesser of (i) the Net Asset Value per Unit determined as of such Retraction Date, less the cost to the Company of the purchase of a Class A Share for cancellation; and (ii) $10.00.
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No distributions will be paid on the Class A Shares if (i) the distributions payable on the Preferred Shares are in arrears, or (ii) following cash distributions by the Company, the NAV per Unit would be less than $15.00.

DBRS finalized the rating on 2021-5-21:

The fixed distributions of dividends on the Preferred Shares will be funded from the dividends received on the common shares in the Portfolio, which are expected to cover approximately 0.7 times the annual Preferred Share distributions.
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The initial downside protection available to holders of the Preferred Shares is approximately 48% (after offering expenses).

Partners Value Split Corp. announced (on 2021-3-19 although, inexplicably, not on their website):

that it has entered into an agreement to sell 4,000,000 Class AA Preferred Shares, Series 12 (the “Series 12 Preferred Shares”) to a syndicate of underwriters led by Scotiabank, BMO Capital Markets, CIBC Capital Markets, RBC Capital Markets and TD Securities Inc. on a bought deal basis.

The Series 12 Preferred Shares will be issued at a price of $25.00 per share, for gross proceeds of $100,000,000. The Series 12 Preferred Shares will carry a fixed coupon of 4.40% and will have a final maturity of February 29, 2028. The Series 12 Preferred Shares are expected to receive a provisional rating of Pfd-2 (low) from DBRS Limited. The net proceeds of the offering will be used to partially fund the redemption of the Company’s Class AA Preferred Shares, Series 7.

The Company has granted the underwriters an over-allotment option to purchase up to an additional 600,000 Series 12 Preferred Shares at the same offering price, exercisable in whole or part at any time for a period of up to 30 days following closing of the offering, which, if exercised in full, would increase the gross offering size to $115,000,000. Closing of the offering is expected to occur on or about April 12, 2021.

The Company owns a portfolio consisting of approximately 119,611,000 Class A Limited Voting Shares of Brookfield Asset Management Inc. (the “Brookfield Shares”) which is expected to yield quarterly dividends that are sufficient to fund quarterly fixed cumulative preferential dividends for the holders of the Company’s preferred shares and to enable the holders of the Company’s capital shares to participate in any capital appreciation of the Brookfield Shares. Brookfield Asset Management Inc. (“BAM”) is a leading global alternative asset manager with approximately US$600 billion of assets under management across real estate, infrastructure, renewable power, private equity and credit. BAM owns and operates long-life assets and businesses, many of which form the backbone of the global economy. Utilizing its global reach, access to large-scale capital and operational expertise, BAM offers a range of alternative investment products to investors around the world—including public and private pension plans, endowments and foundations, sovereign wealth funds, financial institutions, insurance companies and private wealth investors. BAM is listed on the New York Stock Exchange and Toronto Stock Exchange under the symbol BAM and BAM.A respectively.

Leslie Yuen, Chief Financial Officer, will be available at (416) 956-5142 to answer any questions regarding the offering.

They later announced (on 2021-3-19):

that as a result of strong investor demand for its previously announced offering, it has agreed to increase the size of the offering and sell 6,000,000 Class AA Preferred Shares, Series 12 (the “Series 12 Preferred Shares”) to a syndicate of underwriters led by Scotiabank, BMO Capital Markets, CIBC Capital Markets, RBC Capital Markets and TD Securities Inc. on a bought deal basis.

The Series 12 Preferred Shares will be issued at a price of $25.00 per share, for gross proceeds of $150,000,000. The Series 12 Preferred Shares will carry a fixed coupon of 4.40% and will have a final maturity of February 29, 2028. The Series 12 Preferred Shares are expected to receive a provisional rating of Pfd-2 (low) from DBRS Limited. The net proceeds of the offering will be used to fund the redemption of the Company’s Class AA Preferred Shares, Series 7.

The Company has granted the underwriters an over-allotment option to purchase up to an additional 900,000 Series 12 Preferred Shares at the same offering price, exercisable in whole or part at any time for a period of up to 30 days following closing of the offering, which, if exercised in full, would increase the gross offering size to $172,500,000. Closing of the offering is expected to occur on or about April 12, 2021.

The Company owns a portfolio consisting of approximately 119,611,000 Class A Limited Voting Shares of Brookfield Asset Management Inc. (the “Brookfield Shares”) which is expected to yield quarterly dividends that are sufficient to fund quarterly fixed cumulative preferential dividends for the holders of the Company’s preferred shares and to enable the holders of the Company’s capital shares to participate in any capital appreciation ofthe Brookfield Shares. Brookfield Asset Management Inc. (“BAM”) is a leading global alternative asset manager with approximately US$600 billion of assets under management across real estate, infrastructure, renewablepower, private equity and credit. BAM owns and operates long-life assets and businesses, many of which form the backbone of the global economy. Utilizing its global reach, access to large-scale capital and operational expertise, BAM offers a range of alternative investment products to investors around the world—including public and private pension plans, endowments and foundations, sovereign wealth funds, financial institutions, insurance companies and private wealth investors. BAM is listed on the New York Stock Exchange and Toronto Stock Exchange under the symbol BAM and BAM.A respectively.

Middlefield Group has announced:

Middlefield Group, on behalf of Real Estate & E-Commerce Split Corp. (the “Company”), is pleased to announce the Company has completed its initial public offering of 1,613,887 class A shares and 1,613,887 preferred shares for total gross proceeds of $40 million. The class A and preferred shares are listed on the Toronto Stock Exchange under the symbols RS and RS.PR.A, respectively.

The Company will invest in a diversified, actively managed portfolio of dividend-paying securities of issuers operating in the real estate or related sectors, including real estate investment trusts, that the Advisor (as defined below) believes are well-positioned to benefit from low interest rates, the rapid adoption of e-commerce, the growth of data infrastructure as well as attractive valuations in various areas of the real estate sector.

The Company’s investment objectives for the:

• Class A shares are to provide holders with:
  • non-cumulative monthly cash distributions; and
  • the opportunity for capital appreciation through exposure to the portfolio
• Preferred shares are to:
  • provide holders with fixed cumulative preferential quarterly cash distributions; and
  • return the original issue price of $10.00 to holders upon maturity

The initial target distribution yield for the class A shares is 8% per annum based on the original subscription price (or $0.10 per month or $1.20 per annum).

The initial target distribution yield for the preferred shares is 5.25% per annum based on the original subscription price (or $0.13125 per quarter or $0.525 per annum).

Middlefield Capital Corporation (the “Advisor”) will provide investment management advice to the Company.

The syndicate of agents was co-led by CIBC Capital Markets and RBC Capital Markets, and includes BMO Capital Markets, Scotiabank, TD Securities Inc., Canaccord Genuity Corp., National Bank Financial Inc., Industrial Alliance Securities, Manulife Securities Incorporated, Raymond James Ltd., Richardson GMP, Middlefield Capital Corporation, Echelon Wealth Partners Inc. and Mackie Research Capital Corporation.

For further information, please visit our website at www.middlefield.com or contact Nancy Tham or Michael Bury in our Sales and Marketing Department at 1.888.890.1868.

Highlights from the prospectus are:

Real Estate & E-Commerce Split Corp. (the “Company”) is a mutual fund established as a corporation under the laws of the Province of Ontario. The Company proposes to offer preferred shares (“Preferred Shares”) and class A shares (“Class A Shares”) at a price of $10.00 per Preferred Share and $15.00 per Class A Share (the “Offering”). Preferred Shares and Class A Shares are issued only on the basis that an equal number of Preferred Shares and Class A Shares will be outstanding at all material times.

The Company will invest in a diversified, actively managed portfolio (the “Portfolio”) of dividend-paying securities of issuers operating in the real estate or related sectors, including real estate investment trusts, that the Advisor (as defined below) believes are well-positioned to benefit from low interest rates, the rapid adoption of e-commerce, the growth of data infrastructure as well as attractive valuations in various areas of the real estate sector (“Real Estate & E-Commerce Issuers”). See “Investment Strategy.”

The investment objectives for the Preferred Shares are to provide holders with fixed cumulative preferential quarterly cash distributions and to return the original issue price of $10.00 to holders on December 31, 2025 (the “Maturity Date”), subject to extension for successive terms of up to five years as determined by the Company’s board of directors. See “Investment Objectives”. The quarterly cash distribution will be $0.13125 per Preferred Share ($0.525 per annum), representing a yield of 5.25% per annum on the issue price of $10.00 per Preferred Share until December 31, 2025. See “Distribution Policy”
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The first distribution will be pro-rated to reflect the period from the Closing Date to December 31, 2020.
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No distributions will be paid on the Class A Shares if (i) the distributions payable on the Preferred Shares are in arrears, or (ii) in respect of a cash distribution by the Company, the net asset value (“NAV” or “Net Asset Value”) per “Unit”, comprised of one Preferred Share and one Class A Share, would be less than $15.00 following the payment of such distributions.
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The Preferred Shares have been provisionally rated Pfd-2 (low) by DBRS Limited.
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The Preferred Shares will be redeemed by the Company on the Maturity Date, subject to extension for successive terms of up to five years as determined by the Board of Directors. The redemption price payable by the Company for a Preferred Share on that date will be equal to the lesser of (i) $10.00 plus any accrued and unpaid distributions thereon and (ii) the NAV of the Company on that date divided by the total number of Preferred Shares then outstanding.
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Monthly: Preferred Shares may be surrendered at any time for retraction to Middlefield Capital Corporation (in such capacity, the “Registrar and Transfer Agent”), the Company’s registrar and transfer agent, but will be retracted only on the second last business day of a month (the “Retraction Date”). Preferred Shares surrendered for retraction by 5:00 p.m. (Toronto time) on or before the twentieth business day prior to the Retraction Date will be retracted on such Retraction Date and the holder will be paid on or before the last business day of the following month (the “Retraction Payment Date”).

Holders of Preferred Shares whose Preferred Shares are surrendered for retraction will be entitled to receive a retraction price per Preferred Share equal to 96% of the lesser of (i) the NAV per Unit determined as of such Retraction Date, less the cost to the Company of the purchase of a Class A Share for cancellation; and (ii) $10.00. For this purpose, the cost of the purchase of a Class A Share will include the purchase price of the Class A Share, and commission and such other costs, if any, related to the liquidation of any portion of the Portfolio to fund the purchase of the Class A Share.
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On the Maturity Date and upon any subsequent maturity date as determined by the Board of Directors, a holder of Preferred Shares may retract such Preferred Shares. The Company will provide at least 60 days’ notice to holders of Preferred Shares of such right. The retraction price payable by the Company for a Preferred Share pursuant to the non-concurrent retraction right will be equal to the lesser of (i) $10.00 plus any accrued and unpaid distributions thereon and (ii) the NAV of the Company on that date divided by the total number of Preferred Shares then outstanding.

DBRS rates the shares Pfd-2(low):

DBRS Limited (DBRS Morningstar) finalized its provisional rating of Pfd-2 (low) assigned to the Preferred Shares issued by Real Estate & E-Commerce Split Corp. (the Company), managed by Middlefield Limited (the Manager). Middlefield Capital Corporation (the Investment Advisor) will provide investment advice to the Company.
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The initial downside protection available to holders of the Preferred Shares is approximately 58% (after offering expenses). Downside protection available to the Preferred Shares consists of the net asset value (NAV) of the Class A Shares. The fixed distributions of dividends on the Preferred Shares will be funded from the dividends received on the securities in the Portfolio, which are expected to cover approximately 1.8 times the annual Preferred Shares distributions.

It’s very nice to see another issue qualifying for the SplitShares index! Vital statistics are:

Assiduous Reader PD writes in and informs me of a new issue SplitShare, Big Banc Split Corp., 6%, 3-Year:

Big Banc Split Corp. (the “Company”) is a mutual fund corporation incorporated under the laws of the Province of Ontario. The Company proposes to offer preferred shares (“Preferred Shares”) and class A shares (“Class A Shares”) at a price of $10.00 per Preferred Share and $10.00 per Class A Share (the “Offering”). Preferred Shares and Class A Shares will be issued only on the basis that an equal number of Preferred Shares and Class A Shares will be outstanding at all material times.

The investment objectives for the Preferred Shares are to provide their holders with fixed cumulative preferential monthly cash distributions in the amount of $0.05 per Preferred Share ($0.60 per annum or 6.0% per annum on the issue price of $10.00 per Preferred Share) until November 30, 2023 (the “Maturity Date”) and to return the original issue price of $10.00 to holders on the Maturity Date. See “Investment Objectives”.
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The Company will invest on an approximately equally-weighted basis in a portfolio (the “Portfolio”) of equity securities (the “Portfolio Shares”) of the following publicly traded Canadian banks: Bank of Montreal; Canadian Imperial Bank of Commerce; National Bank of Canada; Royal Bank of Canada; The Bank of Nova Scotia; and The Toronto-Dominion Bank. In order to seek to generate additional returns and enhance the Portfolio’s income, the Manager may write covered call options and cash covered put options in respect of some or all of the Portfolio Shares held in the Portfolio. See “Investment Objectives” and “Investment Strategies”.

The Preferred Shares will not be rated by any rating organization. See “Description of the Securities”. Based on the initial expected net asset value per unit (consisting of one Preferred Share and one Class A Share (each, a “Unit”)), after taking into account offering expenses, the asset coverage ratio based on the Preferred Share original issue price of $10.00 is 190% and the Downside Protection is 47.5%. “Downside Protection” refers to the percentage that the Portfolio would have to decline in value before holders of the Preferred Shares would be in a first-dollar loss position.
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“Maturity Date” means November 30, 2023, subject to extension for successive terms of up to 3 years as determined by the Company’s Board of Directors.
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The policy of the Board of Directors of the Company will initially be to pay monthly noncumulative distributions to the holders of Class A Shares in the amount of $0.067 per Class A Share. Such distributions will be paid on or before the 15th day of the month following the month in respect of which the distribution is declared payable. No distributions will be paid on the Class A Shares (i) if the distributions payable on the Preferred Shares are in arrears, or (ii) if after paying a cash distribution, the NAV per Unit would be less than $15.00.
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Holders of Preferred Shares whose Preferred Shares are surrendered for [monthly] retraction will be entitled to receive a retraction price per Preferred Share equal to the lesser of (i) 95% of the NAV per Unit determined as of such Retraction Date, less the cost to the Company of the purchase of a Class A Share for cancellation; and (ii) $10.00 (the “Preferred Share Retraction Price”).
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On a Maturity Date, a holder of Preferred Shares may retract such Preferred Shares. The Company will provide at least 60 days’ notice by way of a press release to holders of Preferred Shares of such right. The Preferred Shares must be surrendered for retraction by 5:00 p.m. (Toronto time) on the last Business Day of the month prior to the Maturity Date or subsequent maturity date, as applicable. The redemption price payable by the Company for a Preferred Share pursuant to the non-concurrent retraction right will be equal to the lesser of (i) $10.00 plus any accrued and unpaid distributions thereon, and (ii) the Net Asset Value of the Company on the Maturity Date divided by the total number of Preferred Shares then outstanding.

As these securities will not be rated, they will not be tracked by HIMIPref™. As I am always quick to explain, this is not because I worship the Credit Rating Agencies or because I can’t do it myself, but because nobody really cares what Hymas Investment Management Inc. thinks of an issue’s credit quality. Something from the agencies, though, gets the attention of management, directors and thousands of salesmen pretty quickly.

It’s nice to see some competition for Brompton Split Banc Corp., SBC and Canadian Banc Corp, BK.