PrefBlog

Dundee Corporation has announced:

that it has issued a Notice of Redemption in respect of the redemption of up to a maximum of 15% of the issued and outstanding Series 5 Preferred Shares, at a price of $25.00 per Series 5 Preferred Share, plus any accrued and unpaid dividends (the “Redemption Price”), on June 30, 2016 (the “Redemption Date”) pursuant to the share provisions of the Series 5 Preferred Shares. The redemption is at the election of the beneficial holders of the Series 5 Preferred Shares, who have the right (the “Redemption Deposit Right”) to deposit and have redeemed up to a maximum of 15% of the Series 5 Preferred Shares beneficially owned by them at the Redemption Price on the
Redemption Date.

As the Series 5 Preferred Shares were issued in “book-entry only” form and are held by CDS Clearing and Depository Services Inc., a beneficial holder of the Series 5 Preferred Shares must contact their broker, dealer, bank, trust company or other nominee on or prior to 5:00 pm (Toronto time) on June 16, 2016 (the “Redemption Deposit Right Deadline”) to exercise his, her or its Redemption Deposit Right.

Holders should consult their tax advisors regarding the tax treatment to them of the redemption of the Series 5 Preferred Shares based on their particular circumstances.

Beneficial holders of the Series 5 Preferred Shares who intend to exercise their Redemption Deposit Right should ensure that they contact their broker, dealer, bank, trust company or other nominee well in advance of the Redemption Deposit Right Deadline to ensure that they understand the procedures and documentation required to exercise such right. The exercise of the Redemption Deposit Right by a holder of the Series 5 Preferred Shares in accordance with the foregoing shall be deemed to be a representation and warranty by such holder to the Corporation that such holder has exercised his, her or its Redemption Deposit Right for up to a maximum of 15% of the Series 5 Preferred Shares beneficially owned by them, and no further Series 5 Preferred Shares. Any holder of the Series 5 Preferred Shares who does not exercise his, her or its Redemption Deposit Right on or prior to the Redemption Deposit Right Deadline (or such other earlier time as may be indicated by their broker, dealer, bank, trust company or other nominee) shall not be entitled to have redeemed any Series 5 Preferred Shares beneficially owned on the Redemption Date.

Payment of the Redemption Price (less applicable withholding taxes, if any) will be made by the Corporation on or after June 30, 2016. After June 30, 2016, the former holders of the redeemed Series 5 Preferred Shares will not be entitled to dividends or to exercise any rights of holders of the Series 5 Preferred Shares in respect of such shares, except the right to receive the amount paid on redemption.

Assiduous Readers will remember that DC.PR.E came into being by exchange from DC.PR.C in a controversial reorganization.

Brookfield Investment Management Inc. has announced:

Global Resource Champions Split Corp. (the “Company”) (TSX: GRP.PR.A) announced today that it has completed its initial public offering of Class A Preferred Shares, Series 1 (the “Series 1 Shares”). The offering raised gross proceeds of $45.0 million, and was offered by a syndicate of agents led by Scotiabank, National Bank Financial Inc., CIBC, RBC Capital Markets, TD Securities Inc. and includes BMO Capital Markets, Raymond James Ltd., Canaccord Genuity Corp., Desjardins Securities Inc. and Laurentian Bank Securities Inc. (the “Agents”). A total of 1,800,000 Series 1 Shares were issued at a price of $25.00 per Series 1 Share. The Company also announced today that it has completed the issuance of 1,800,000 capital shares of the Company to Partners Value Investments Inc.

The Series 1 Shares have been rated Pfd-2 (low) by DBRS Limited. The Series 1 Shares will commence trading today on the Toronto Stock Exchange under the symbol “GRP.PR.A”.

The Company’s investment objectives with respect to the Series 1 Shares are (i) to provide holders of Series 1 Shares with fixed cumulative preferential quarterly cash distributions in the amount of $0.390625 per Series 1 Share to yield 6.25% per annum on the original issue price of the Series 1 Shares and (ii) on or about May 25, 2023, to pay the holders of Series 1 Shares the original issue price of $25.00 of those shares, through the redemption of each Series 1 Share held on May 25, 2023. Such quarterly distributions are expected to be paid by the Company to holders of record on the last Business Day of March, June, September and December in each year with payments being made on or before the 15th day of the following month. The initial distribution will be prorated from today’s date until September 30, 2016 and is expected to be payable on or before October 15, 2016 to holders of record on September 30, 2016. The final prospectus is available on SEDAR at www.sedar.com.

Initially, the Portfolio will consist of 15 large capitalization resource companies and will be approximately equally weighted on a U.S. dollar equivalent basis.

The prospectus may be found on SEDAR at “Global Resource Champions Split Corp. Apr 27 2016 23:01:16 ET Final long form prospectus – English PDF 883 K”. The regulators will not permit me to link directly to this public document since I and my readers are all disgusting investor scum, most of whom don’t even have government jobs. Brookfield hasn’t put it up on their site because they’re lazy.

Marketting for this issue commenced on April 5, 2016.

Interesting snippets from the Top Secret Prospectus include the following:

The Series 1 Shares and the Capital Shares are being offered separately but will be issued only on the basis that an equal number of Series 1 Shares and Capital Shares will be outstanding. Partners Value Investments Inc. (formerly Partners Value Fund Inc.) (“Partners Value Investments”) will acquire all of the Capital Shares to be issued in connection with the Offering of the Series 1 Shares under this prospectus.
…
Investment Objectives:
The Company’s investment objectives with respect to the Series 1 Shares are:
(a) to provide holders of Series 1 Shares with fixed cumulative preferential quarterly cash distributions in the amount of $0.390625 per Series 1 Share to yield 6.25% per annum on the original issue price of the Series 1 Shares; and
(b) on or about May 25, 2023 (the “Final Series 1 Redemption Date”), to pay the holders of Series 1 Shares the original issue price of $25.00 per share, through the redemption of each Series 1 Share held on the Final Series 1 Redemption Date.
…
Holders of Series 1 Shares will be entitled to receive quarterly fixed cumulative preferential distributions equal to $0.390625 per Series 1 Share to yield 6.25% per annum on the original issue price of the Series 1 Shares. Such quarterly distributions are expected to be paid by the Company to holders of record on the last Business Day of March, June, September and December in each year with payments being made on or before the 15th day of the following month. The initial distribution will be prorated from the Closing Date until September 30, 2016 and is expected to be payable on or about October 15, 2016 to holders of record on September 30, 2016. See “Details of the Offering — Series 1 Shares — Dividends”.

The dividends on the Preferred Shares are expected to be funded from the dividends received on the Portfolio Securities. If, for any reason, the dividends received by the Company on the Portfolio Securities are insufficient to fully fund the Preferred Share dividends, the Company may sell Portfolio Securities, borrow under the Revolving Credit Facility or Margin Facility, as applicable, or write covered call options on such shares to the extent necessary to fund any shortfall. Any portion of the dividends on the Preferred Shares which is derived from the proceeds of sale of the Portfolio Securities will consist of Ordinary Dividends or a combination of a Capital Gains Dividend and Ordinary Dividends. Any option premium received in a year (other than in respect of options outstanding at year end or options that are subject to the DFA Rules (as defined below)) will be distributed as a Capital Gains Dividend in the year on the Preferred Shares. There can be no assurance that the Company will be able to pay dividends to the holders of Preferred Shares. See “Dividend Policy”.
…
If the Company is not permitted to issue Debentures at any time pursuant to the terms of the Indenture and a purchaser cannot be found pursuant to the terms of the Remarketing Agreement or the retracting holder has withheld its consent, holders who surrender Series 1 Shares for retraction will receive cash in an amount equal to the Series 1 Share Retraction Price. See “Details of the Offering – Series 1 Shares – Retraction.” The Series 1 Share Retraction Price will be equal to the least of (i) 95% of the Net Asset Value per Unit on the Retraction Valuation Date, (ii) 95% of the VWAP of the Series 1 Shares for the three Business Days ending on the Deposit Date and (iii) $23.75.
…
Series 1 Shares may be redeemed by the Company at any time at a price (the “Series 1 Share Redemption Price”) equal to (i) $25.00 per share plus accrued and unpaid dividends if the date specified for redemption is prior to the Final Series 1 Redemption Date; and (ii) the lesser of (x) $25.00 plus accrued and unpaid dividends and (y) the Net Asset Value per Unit on the Final Series 1 Redemption Date if the date specified for redemption is the Final Series 1 Redemption Date. See “Details of the Offering — Series 1 Shares — Redemption”.
…
The Series 1 Shares have been provisionally rated Pfd-2 (low) by DBRS Limited. See “Details of the Offering — Series 1 Shares — Ratings”.
…
No distributions will be paid on the Capital Shares if (i) the distributions payable on the Series 1 Shares or the payment of interest on any Debentures issued by the Company are in arrears, or (ii) after the payment of the distribution by the Company, the NAV per Unit would be less than $36.00. See “Calculation of Net Asset Value”.
…
In the case of a holder that is an individual, Ordinary Dividends will be subject to the gross-up and dividend tax credit rules under the Tax Act normally applicable to taxable dividends received from a taxable Canadian corporation. Such Ordinary Dividends will be eligible for the enhanced gross-up and dividend tax credit if the Company designates the Ordinary Dividends as “eligible dividends”. There may be limitations on the Company’s ability to designate Ordinary Dividends as eligible dividends.

GRP.PR.A will be tracked by HIMIPref™ and has been assigned to the SplitShare subindex.

The issue traded 49,135 shares today in a range of 24.76-94 before closing at 24.76-80, 3×5. Vital statistics are:

Update, 2016-5-9: DBRS finalizes Pfd-2(low) rating:

The initial downside protection available to the holders of the Preferred Shares is expected to be greater than 54% (after offering expenses). Downside protection available to the Pre¬ferred Shares consists of the NAV of the Capital Shares. Upon maturity, the holders of the Preferred Shares will be en¬titled to the value of the Portfolio Securities, up to the face value of the Preferred Shares, in priority to the holders of the Capital Shares (but behind any secured creditors and other senior indebtedness). The holders of the Capital Shares will be entitled to the distribu¬tion in the excess of dividend income on the Portfolio Securities beyond what is required to pay the holders of the Preferred Shares, as well as all capital appreciation.

The Pfd-2 (low) rating of the Preferred Shares is primarily based on the expected level of downside protection and dividend coverage available to holders of the Preferred Shares, as well as the credit quality and consistency of dividend distributions of the Portfolio holdings.