PrefBlog

These are total returns, with dividends presumed to have been reinvested at the bid price on the ex-date. The list has been restricted to issues in the HIMIPref™ indices.

Brookfield Soundvest Rising Distribution Split Trust has released its 1H09 Financials:

The published combined net asset value (the “Combined Net Asset Value”), which refers to the value of a capital unit and a preferred security of the Trust, was $8.52 at December 31, 2008 and increased by 13.4% during the period to $9.66 at June 30, 2009. During the same time frame, the S&P/TSX Capped Income Trust Total Return Index gained 14.5%. The Fund underperformed the index based on net asset value despite generating returns from all four income trust sectors in excess of the overall index. The underperformance is largely due to the net disbursements made from the Fund during the period ended June 30, 2009.

More underperformance!

To June 30, 2009, 13,400 capital units and 13,400 preferred securities had been purchased under the NCIB. We continue to be of the opinion that capital units and preferred securities of the Trust may become available during the proposed purchase period at prices that would make such purchases in the best interests of the Trust and its securityholders.
…
Subsequent to June 30, 2009, an additional 6,500 capital units and 6,500 preferred securities had been purchased under the normal course issuer bid.

Opinions are very nice, but cash is better. The capital units closed yesterday at 0.84-88, 6×2, while the preferreds were at 7.67-75, 1×9. The NAV was 10.46 on August 21 and, if anecdotal memory serves, this discount has been present throughout most of the piece. These guys have been refusing to execute their NCIB in a meaningful manner even with a discount to NAV on the order of 20%!

On October 23, 2008, the Trust announced that it was temporarily suspending the annual redemption rights that would have arisen in November in respect of both its Capital Units and Preferred Securities. The Trust’s Declaration of Trust provides for the suspension of redemptions when the Coverage Ratio cannot be maintained. The Trust is continuing to monitor its net asset value to determine when it will be able to resume redemptions.

This is a rather disingenuously phrased paragraph. The Declaration of Trust allows the manager to suspend redemptions when coverage is below 1.4, but does not stipulate that it must be suspended. Quite frankly, I consider the suspension of redemptions to be rather sharp practice by the Manager … and one reason why the combined units are trading so far below the combined NAV.

The Income Coverage Ratio is a rare piece of cheerful news. Gross Income for the half, excluding “Return of Capital” was 2,517,076; expenses were 431,767 (including Management fees of 275,909 and “General and Administrative” fees of 58,205, “Accounting and Administrative” fees of 16,916 and Directors’ fees of 6,928 … keep milking that cow, boys!); therefore net income was 2,085,309 to cover preferred security interest expense of 1,692,707. The Income Coverage Ratio is therefore 1.2+:1.

The directors signing the fund statements were Jeffrey M. Blidner & George E. Myhal, of Brookfield Investment Funds Management Inc., the Manager of the fund. One may only hope that, in their role as officers of the Manager of the Fund, they did not accept Directors Fees.

BSD.PR.A was last mentioned on PrefBlog when its Credit Trend was revised to “Stable” by DBRS.

BSD.PR.A is tracked by HIMIPref™, but has been relegated to the “Scraps” index due to credit concerns.

Well, I was late reporting the suspension of the capital unit dividend … and I am equally late reporting the reinstatement!

Brompton Announced on April 20:

that a monthly distribution in the amount of $0.10 per Class A share will be paid on May 14, 2009 to Class A shareholders of record at the close of business on April 30, 2009.

Recent improvement in equity markets has resulted in an increase in net asset value per unit (consisting of one class A share and one preferred share) of SBC to $16.32 as at April 16, 2009, which allows the Fund to reinstate the monthly class A share distribution. In accordance with the Class A Share Provisions and the prospectus, no cash distribution may be paid on the class A shares, if after payment of the distribution by the Fund, the net asset value per unit would be less than $15.00. The Fund will continue to monitor its net asset value per unit on a monthly basis to determine whether the Fund will pay a Class A distribution in each subsequent month. The Fund intends to continue to pay the $0.10 monthly, non-cumulative distribution per class A share in months where the net asset value per unit exceeds the $15.00 threshold after the payment of such distributions.

SBC.PR.A was last mentioned on PrefBlog when it was upgraded to Pfd-3(high) by DBRS. SBC.PR.A is tracked by HIMIPref™, but is relegated to the “Scraps” index on credit concerns.

Faircourt Asset Management has announced:

that the [Faircourt Income & Growth Split] Trust has completed its previously announced distribution to its unitholders of 4,903,305 rights (the “Rights”) exercisable for units (“Units”) of the Trust (the “Rights Offering”). All 4,903,305 Rights issued pursuant to the Rights Offering were exercised prior to their expiry (4:00 pm on August 27, 2009) for a total of 4,903,305 Units, each Unit consisting of one trust unit of the Trust (a “Trust Unit”) and one transferable warrant to acquire a Trust Unit (a “Warrant”), at a price of $2.30 per Unit for aggregate gross proceeds of $11.3 million. Each Warrant entitles the holder thereof to purchase one Trust Unit on, and only on, June 25, 2010 at a subscription price of $4.00.

TD Securities Inc. was the dealer manager for the Rights Offering.

The Trust will use the net proceeds of this issue to increase capital for investment.

Faircourt doesn’t exactly have the most forthcoming website in the world, but the prospectus for the Rights issue is available on SEDAR, dated July 15:

During the period from January 1, 2009 up to and including July 2, 2009, 441,641 Trust Units have been redeemed by the Trust in accordance with the Trust Unit’s annual redemption rights and 101,900 Preferred Securities have been repurchased by the Trust in accordance with the Trust’s normal course issuer bid. Effective January 2009, the Trust decided not to renew its loan facility, which facility was undrawn as of December 31, 2008. As of the date hereof, there are 4,903,305 Trust Units and 9,856,908 Preferred Securities (issued in $10 denominations) issued and outstanding of the Trust.

After giving effect to this Offering and assuming the exercise in full of the Rights (but not the exercise of the Warrants), there will be issued and outstanding the following securities of the Trust: 9,806,610 Trust Units, 9,856,908 Preferred Securities and 4,903,305 Warrants (exercisable into 4,903,305 Trust Units).

The NAV was 4.49 as of August 27 implying 22.0-million in capital. Proceeds of the Rights issue were 11.3-million, so excess capital is now 33.3-million against Preferred obligations of 98.6-million. Asset Coverage is therefore approximately 1.3+:1.

FIG.PR.A was last mentioned on PrefBlog when it was upgraded by DBRS to Pfd-4. FIG.PR.A is tracked by HIMIPref™, but has been relegated to the “Scraps” index due to credit concerns.