PrefBlog

Quadravest has announced:

Dividend 15 Split Corp. II (the “Company”) is pleased to announce that 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 and will also include BMO Capital Markets, TD Securities Inc., GMP Securities L.P. and Canaccord Genuity Corp.

The Preferred Shares will be offered at a price of $10.00 per Preferred Share to yield 5.25% on the issue price and the Class A Shares will be offered at a price of $8.50 per Class A Share to yield 14.12% on the issue price. The closing price on the TSX of each of the Preferred Shares and the Class A Shares on March 25, 2014 was $10.14 and $9.08, respectively.

The net proceeds of the secondary offering will be used by the Company to invest in an actively managed portfolio of dividend-yielding common shares which includes each of the 15 Canadian companies listed below:

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 $0.04375 per Preferred Share to yield 5.25% per annum on the original issue price; and
ii. on or about December 1, 2019, to pay the holders of the Preferred Shares the original issue price of those shares.

Class A Shares:
i. to provide holders of the Class A Shares with regular monthly cash dividends initially targeted to be $0.10 per Class A; and
ii. on or about December 1, 2019, to pay the 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. (Toronto time) on March 27, 2014.

The pricing on this is interesting … as may be seen from the press release, the new units are being offered at a nice discount to market. Discerning investors will, however, note that the NAVPU on March 14 was 16.55 and that a reasonable proxy, XDV, is up only about 60bp since then … so the estimated current NAVPU is about 16.64 and the unit price for the offering is 18.50. Some bargain!

DF.PR.A was last mentioned on PrefBlog when it got bigger last November. DF.PR.A is tracked by HIMIPref™ but is relegated to the Scraps index on credit concerns.

Update, 2014-4-29: On April 10, Quadravest announced:

Dividend 15 Split Corp. II (the “Company”) is pleased to announce it has completed an overnight offering of 2,225,250 Preferred Shares and 2,225,250 Class A Shares. Total gross proceeds of the offering were $41.2 million, bringing the Company’s net assets to approximately $153.7 million. Shares will trade on the Toronto Stock Exchange under the existing symbol DF.PR.A (Preferred Shares) and DF (Class A shares).

The Preferred Shares were offered at a price of $10.00 per share to yield 5.25% annually and the Class A Shares were offered at a price of $8.50 per share targeting to yield 14.1%, based on the current distribution policy.

The offering was co-led by National Bank Financial Inc., CIBC and RBC Capital Markets and also included BMO Capital Markets, TD Securities Inc., GMP Securities L.P. and Canaccord Genuity Corp.

This entry was posted on Wednesday, March 26th, 2014 at 3:50 pm and is filed under Issue Comments. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.