PrefBlog

On November 17, Quadravest announced:

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., 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% and the Class A Shares will be offered at a price of $8.75 per Class A Share to yield 17.24%.

The closing price on the TSX of each of the Preferred Shares and the Class A Shares on November 16, 2016 was $10.15 and $9.02, respectively.

Since inception of the Company, the aggregate dividends paid on the Preferred Shares have been $6.81 per share and the aggregate dividends paid on the Class A Shares have been $15.63 per share, for a combined total of $22.44. 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 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 the Preferred Shares with fixed, 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 2020; and
ii. on or about the termination date, currently December 1, 2020 (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 in an amount to be determined by the Board of the 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, 2020 (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. EST on November 18, 2016.

On November 18, Quadravest further announced:

Financial 15 Split Corp. (the “Company”) is pleased to announce it has completed the overnight marketing of up to 2,040,000 Preferred Shares and up to 2,040,000 Class A Shares of the Company. Total proceeds of the offering are expected to be approximately $38.3 million.

The offering is being co-led by National Bank Financial Inc., CIBC, RBC Capital Markets, Scotia Capital Inc., and also includes BMO Capital Markets, GMP Securities L.P., Canaccord Genuity Corp., Raymond James, Desjardins Securities Inc., Mackie Research Capital Corporation and Manulife Securities Incorporated.

The sales period of the overnight offering has now ended.

There was a similar offering in November 2015.

The offering price of $18.75 per unit looks pretty good compared to the November 15 NAVPU of $16.80. They’ve done well!

The fund is getting quite large (and therefore, the preferred shares are getting quite liquid!) – according to the 16H1 Financial Statements, total fund assets were $297.3-million with just over 19-million units outstanding.

Update 2016-12-2: Deal closed:

Financial 15 Split Corp. (the “Company”) is pleased to announce it has completed the overnight offering of 2,040,000 Preferred Shares and 2,040,000 Class A Shares of the Company. Total proceeds of the offering were $38.3 million, bringing the Company’s net assets to approximately $366.2 million. The shares will trade on the Toronto Stock Exchange under the existing symbols of FTN.PR.A (Preferred Shares) and FTN (Class A Shares).

The Preferred Shares were offered at a price of $10.00 per Preferred Share to yield 5.25% and the Class A Shares were offered at a price of $8.75 per Class A Share to yield 17.24%.

The offering was co-led by National Bank Financial Inc., CIBC, RBC Capital Markets, Scotia Capital Inc., and also included BMO Capital Markets, GMP Securities L.P., Canaccord Genuity Corp., Raymond James, Desjardins Securities Inc., Mackie Research Capital Corporation and Manulife Securities Incorporated.

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