PrefBlog

Brompton Funds has announced:

Brompton Lifeco Split Corp. (the “Company”) is pleased to announce it is undertaking an overnight treasury offering of class A and preferred shares.

The class A shares will be offered at a price of $7.65 for a distribution rate of 11.8% on the issue price, and the preferred shares will be offered at a price of $10.05 for a yield to maturity of 5.4%. The closing price on the Toronto Stock Exchange (“TSX”) for each of the class A and preferred shares on January 24, 2018 was $7.83 and $10.32, 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 prior to pricing, as adjusted for dividends and certain expenses to be accrued prior to or upon settlement of the offering.

The sales period of this overnight offering will end at 9:00 a.m. (ET) on January 26, 2018. The offering is expected to close on or about February 6, 2017 and is subject to certain closing conditions including approval by the TSX.
The Company invests in a portfolio of common shares of Canada’s four largest publicly-listed life insurance companies on an approximately equal weight basis: Great-West Lifeco Inc., Industrial Alliance Insurance and Financial Services Inc., Manulife Financial Corporation and Sun Life Financial Inc.

The investment objectives for the class A shares are to provide holders with regular monthly cash distributions targeted to be $0.075 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 $0.14375 per preferred share, and to return the original issue price plus accrued dividends (if any) to holders of preferred shares on April 29, 2019.

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

So the offering price for a Whole Unit is 17.70, against a NAVPU of 17.26 as of January 24. That’s a premium of 2.5% … not as much as we’ve seen on other recent deals, but still a pretty nice business!

Update, 2018-1-26: They raised $38.6-million. Not great, but not too shabby!

Brompton Lifeco Split Corp. (the “Company”) is pleased to announce a successful overnight treasury offering of class A and preferred shares. Gross proceeds of the offering are expected to be approximately $38.6 million. The offering is expected to close on or about February 6, 2018 and is subject to certain closing conditions including approval by the Toronto Stock Exchange (the “TSX”).

This entry was posted on Friday, January 26th, 2018 at 2:40 am 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.