DGS.PR.A Should Commence Trading Dec. 3

Brompton Group has announced:

that Dividend Growth Split Corp. has filed a final prospectus in respect of an initial public offering of class A and preferred shares for a maximum offering size of $100 million. The preferred shares have been provisionally rated Pfd-2 by Dominion Bond Rating Service Limited.Dividend Growth Split Corp. has been created to provide investors with an investment in 20 large capitalization Canadian equities that have demonstrated the highest dividend growth rates over a five year period and have a current dividend yield of at least 2% per annum, utilizing a split share structure on a low cost basis.

Class A shareholders will receive the benefits of monthly cash distributions targeted to be 8.0% per annum, low management fees and the opportunity for growth in net asset value. Preferred shareholders will receive attractive quarterly distributions of 5.25% per annum supported by the high credit quality of the underlying assets.

Asset coverage is 2.5:1 at the issue price – probably less after initial fees and expenses, but I haven’t even read as far as that in the prospectus! I do see that the wind-up date is November 30, 2014, with no intervening calls, and:

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, after payment of the distribution by the Company, the NAV per Unit would be less than $15.00. In addition, it is intended that the Company will not pay distributions in excess of the targeted $0.10 per month, on the Class A Shares if, after payment of the distribution, the NAV per Unit would be less than $25.00 unless the Company has to make such distributions to fully recover refundable taxes.

No decision has been made as to whether to include these in the HIMIPref™ universe; I’m going to wait until I see how much they’re able to sell.

One Response to “DGS.PR.A Should Commence Trading Dec. 3”

  1. […] DGS.PR.A is not tracked by HIMIPref™. The issue was announced last November. […]

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