PrefBlog

Quadravest has announced:

North American Financial 15 Split Corp. (the “Company”) is pleased to announce 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, GMP Securities L.P., Canaccord Genuity Corp., Dundee Securities, Raymond James, Desjardins Securities Inc., 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% on the issue price and the Class A Shares will be offered at a price of $8.65 per Class A Share to yield 13.87% on the issue price. The closing price on the TSX of each of the Preferred Shares and Class A Shares on May 27, 2015 was $10.08 and $9.19, respectively.

Since inception of the Company, the aggregate dividends paid on the Preferred Shares have been $5.58 per share and the aggregate dividends paid on the Class A Shares have been $8.85 per share (including one special distribution of $0.25 per share), for a combined total of $14.43. All distributions to date have been made in tax advantage eligible Canadian dividends or capital gains dividends.

The net proceeds of the secondary offering will be used by the Company to invest in a high quality portfolio consisting of 15 financial services companies made up of Canadian and U.S. issuers as follows:

Bank of Montreal	National Bank of Canada	Bank of America Corp.
The Bank of Nova Scotia	Manulife Financial Corporation	Citigroup Inc.
Canadian Imperial Bank of Commerce	Sun Life Financial Services of Canada Inc.	Goldman Sachs Group Inc.
Royal Bank of Canada	Great-West Lifeco Inc.	JP Morgan Chase & Co.
The Toronto-Dominion Bank	CI Financial Corp.	Wells Fargo & Co.

The Company’s investment objectives are:
Preferred Shares:
i. to provide holders of Preferred Shares with cumulative preferential monthly cash dividends, currently in the amount of 5.25% annually, to be set by the Board of Directors annually subject to a minimum of 5.25% until 2019; and
ii. on or about the termination date of December 1, 2019 (subject to further 5 year extensions thereafter), to pay the holders of the Preferred Shares $10 per Preferred Share.

Class A Shares:
i. to provide holders of the Class A Shares with regular monthly cash distributions in an amount to be determined by the Board of Directors; and
ii. to permit holders to participate in all growth in the net asset value of the Company above $10 per Unit, by paying holders on or about the termination date of December 1, 2019 (subject to further 5 year extensions thereafter) such amounts as remain in the Company after paying $10 per Preferred Share.

The sales period of this overnight offering will end at 9:00 a.m. (Toronto time) on May 29, 2015.

The NAVPU of the fund is 16.97 as of May 27 and the new Whole Units are being flogged at 18.65. When the Split Share structure is working as intended, it’s a thing of beauty! As well as being a counter-example to the Modigliani-Miller hypothesis, last mocked on PrefBlog on March 15, 2013.

FFN.PR.A was last mentioned on PrefBlog when they changed their name to North American Financial 15 Split Corp.; it will also be noted that they got bigger in August, 2014.

FFN.PR.A is tracked by HIMIPref™ but is relegated to the Scraps index on credit concerns.

Update, 2015-5-29: It did all right!

North American Financial 15 Split Corp. (the “Company”) is pleased to announce it has completed the overnight marketing of up to 1,380,000 Preferred Shares and up to 1,380,000 Class A Shares. Total proceeds of the offering are expected to be approximately $25.7 million.

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, GMP Securities L.P., Canaccord Genuity Corp., Dundee Securities, Raymond James, Desjardins Securities Inc., Mackie Research Capital Corporation and Manulife Securities Incorporated.

The sales period of the overnight offering has now ended.

This entry was posted on Thursday, May 28th, 2015 at 7:55 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.