PrefBlog

Brompton Group has announced (although not yet on their website because they’re … um, well, I’ve sent an eMail to my friend ChrisC Update: Now available here):

Life & Banc Split Corp. (the “Company”) (TSX:LBS)(TSX:LBS.PR.A)is pleased to announce it is undertaking an overnight treasury offering of class A and preferred shares (respectively, the “Class A Shares” and “Preferred Shares”).

The sales period for this overnight offering will end at 9:00 a.m. (ET) on Tuesday September 26, 2017. The offering is expected to close on or about October 4, 2017 and is subject to certain closing conditions including approval by the Toronto Stock Exchange (“TSX”).

The Class A Shares will be offered at a price of $9.90 per Class A Share for a distribution rate of 12.1% on the issue price, and the Preferred Shares will be offered at a price of $10.00 per Preferred Share for a yield to maturity of 4.8%. The closing price on the TSX for each of the Class A and Preferred Shares on September 22, 2017 was $10.10 and $10.20, 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 (calculated as at September 21, 2017), as adjusted for dividends and certain expenses to be accrued prior to or upon settlement of the offering.

The Company invests in a portfolio (the “Portfolio”) consisting of common shares of the six largest Canadian banks and the four major publicly traded Canadian life insurance companies. The Portfolio consists of common shares of the following Canadian banks and Canadian life insurance companies:

The Bank of Nova Scotia	Royal Bank of Canada
National Bank of Canada	Industrial Alliance Insurance and Financial Services Inc.
The Toronto-Dominion Bank	Great-West Lifeco Inc.
Canadian Imperial Bank of Commerce	Manulife Financial Corporation
Bank of Montreal Sun	Life Financial Inc.

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 $0.11875 per Preferred Share, and to return the original issue price to holders of Preferred Shares on November 29, 2018.

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

The Company is also pleased to announce that its board of directors has approved an extension of the maturity date of the Class A and Preferred Shares of the Company for an additional term to October 30, 2023. The Preferred Share dividend rate for the extended term will be announced at least 60 days prior to the original November 29, 2018 maturity date. The new dividend rate will be determined based on the market yields for Preferred Shares with similar terms.

So the Whole Units are being offered for a total of 19.90, vs a NAV of 19.32 as of September 21 – which at least is not as much a premium as we have recently seen elsewhere.

Update, 2017-09-26: The offering was successful:

Life & Banc Split Corp. (the “Company”) is pleased to announce a successful overnight treasury offering of class A and preferred shares (respectively, the “Class A Shares” and “Preferred Shares”). Gross proceeds of the offering are expected to be approximately $81.6 million. The offering is expected to close on or about October 4, 2017 and is subject to certain closing conditions including approval by the Toronto Stock Exchange (the “TSX”). The Company has granted the Agents (as defined below) an over-allotment option, exercisable for 30 days following the closing date of the offering, to purchase up to an additional 15% of the number of Class A Shares and Preferred Shares issued at the closing of the offering.

This entry was posted on Monday, September 25th, 2017 at 5:44 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.