PrefBlog

On January 26, Brompton Group announced (nb: slight change in table layout … JH):

Brompton Oil 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 $9.75 for a distribution rate of 12.3% on the issue price, and the preferred shares will be offered at a price of $10.00 for a yield to maturity of 5.2%. The closing price on the Toronto Stock Exchange (“TSX”) for each of the class A and preferred shares on January 25, 2017 was $10.10 and $10.16, 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, 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 27, 2017. The offering is expected to close on or about February 3, 2017 and is subject to certain closing conditions including approval by the TSX.

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

The Company invests in a portfolio of equity securities of large capitalization North American oil and gas issuers, primarily focused on those with significant exposure to oil. All portfolio securities are S&P/TSX Composite Index or S&P 500 Index constituents which have a market capitalization of at least $2 billion and pay a dividend. Currently, the portfolio consists of common shares of the following companies:

Anadarko Petroleum Corporation	Cimarex Energy Co.	Whitecap Resources Inc.
Pioneer Natural Resources Company	Apache Corporation	Crescent Point Energy Corporation
PrairieSky Royalty Ltd.	ARC Resources Ltd.	Devon Energy Corporation
Suncor Energy Inc.	Canadian Natural Resources Limited	EOG Resources Inc.
Vermilion Energy Inc.	Cenovus Energy Inc.	Occidental Petroleum Corporation

The investment objectives for the class A shares are to provide holders with regular monthly cash distributions targeted to be $0.10 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 $0.1250 per preferred share, and to return the original issue price to holders of preferred shares on the Company’s maturity date (March 31, 2020).

Today they announced:

Brompton Oil Split Corp. (the “Company”) is pleased to announce the results of its overnight treasury offering of class A and preferred shares. Gross proceeds of the offering are expected to be approximately $11 million. The offering is expected to close on or about February 3, 2017 and is subject to customary closing conditions including approval from the Toronto Stock Exchange (the “TSX”).

Well, another $5-million-odd worth on the market won’t solve OSP.PR.A’s liquidity problems, but every little bit helps!

Update, 2017-2-3: Brompton Group has announced:

Brompton Oil Split Corp. (the “Company”) is pleased to announce that it has completed a treasury offering of 549,800 class A shares and 549,800 preferred shares for aggregate gross proceeds of approximately $11 million. The class A shares and preferred shares will trade on the Toronto Stock Exchange (the “TSX”) under the existing symbols OSP (class A shares) and OSP.PR.A (preferred shares).

The class A shares were offered at a price of $9.75 per class A share and the preferred shares were offered at a price of $10.00 per preferred share. The class A and preferred share offering prices were determined so as to be non-dilutive to the net asset value per unit of the Company as of the pricing date, as adjusted for dividends and certain expenses accrued prior to closing of the offering.

On January 26, Dividend 15 Split Corp. announced:

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, RBC Capital Markets, Scotia Capital Inc., and will also include BMO Capital Markets, TD Securities Inc., GMP Securities L.P., Canaccord Genuity Corp., Raymond James, Desjardins Securities Inc., Echelon Wealth Partners, 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 $10.95 per Class A Share to yield 10.96%. The closing price on the TSX of each of the Preferred Shares and the Class A Shares on January 25, 2017 was $10.41 and $11.20, respectively.

Since inception of the Company, the aggregate dividends declared on the Preferred Shares have been $6.76 per share and the aggregate dividends declared on the Class A Shares have been $18.90 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 $25.66 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 27, 2017.

Today the company announced:

Dividend 15 Split Corp. (the “Company”) is pleased to announce it has completed the overnight marketing of up to 3,056,000 Preferred Shares and up to 3,056,000 Class A Shares of the Company. The total proceeds of the offering are expected to be approximately $64.0 million.

DBRS has announced that it:

has today placed the BBB Issuer Rating and the Medium-Term Notes (MTNs) rating and the Pfd-3 Preferred Shares – Cumulative rating of AltaGas Ltd. (AltaGas or the Company) Under Review with Developing Implications. These rating actions follow the announcement that the Company has agreed to acquire WGL Holdings Inc. (WGL) for a total consideration of CAD 8.4 billion, including assumption of CAD 2.4 billion of debt (the Acquisition). The Acquisition is subject to WGL shareholders and certain regulatory and government approvals. The Acquisition is expected to close by the end of the second quarter of 2018.
…
DBRS notes that there is execution risk associated with the Acquisition. In addition to a shifting political climate in the United States, there is execution risk associated with regulatory, government hurdles and the financing plan. The expectation of the Acquisition closing in approximately 18 months considers the regulatory and political risks. Regulatory approvals are required from three separate public utility commissions in Virginia, Maryland and District of Columbia, the Federal Energy Regulatory Commission (FERC), the Committee on Foreign Investment in the United States (CFIUS), and expiration or termination of any applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the satisfaction of customary closing conditions. There is also execution risk with respect to generating expected proceeds from the proposed sale of AltaGas assets to finance the acquisition.

WGL has a reasonably healthy financial profile supported largely by its diverse and growing regulated utility operations. On a pro forma basis, DBRS expects initial pressure on AltaGas consolidated credit metrics at the close of the Acquisition in 2018 as a result of higher debt levels, including debt at WGL. Ratings could be pressured should the timing and amount of asset sales envisaged in the preliminary financing plan not materialize, as this could result in higher leverage. There is also currency risk associated with the USD 4.95 billion bridge credit facility. As the financing plan at closing of the Acquisition could change based on the timing, amounts and execution of the planned asset sales, the impact on the Company’s financial risk assessment (FRA) is uncertain at this time.

DBRS has placed the ratings of AltaGas Under Review with Developing Implications, considering the execution risks and uncertainties surrounding the financing plan. As noted in the latest DBRS rating report dated November 14, 2016, DBRS expects AltaGas to fund its growth projects and acquisitions with a prudent mix of debt and equity in order to maintain the company’s debt-to-capital ratio in the low 50% range. DBRS will further review the Company’s ratings as more information becomes available and aims to resolve the Under Review status of the ratings once financing details are known and the Acquisition has closed.

AltaGas has several issues of preferred shares outstanding, the most recently issued being ALA.PR.I, which commenced trading in November, 2015. Affected issues are ALA.PR.A, ALA.PR.B, ALA.PR.E, ALA.PR.G and ALA.PR.I.

Implied Volatility analysis yields the following chart:

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