PrefBlog

Quadravest has announced:

Financial 15 Split Corp. (the “Company”) is pleased to announce it will undertake an exchange offering for holders of units of SCITI Trust whereby one Class A Share of the Company will be offered in exchange for 1.17614 freely-tradable listed units of SCITI Trust (the “Exchange Offer”). The maximum number of Class A Shares to be issued by the Company in the Exchange Offer will be 2,917,000.

In conjunction with the Exchange Offer, the Company will also undertake to offer up to 2,917,000 Preferred Shares of the Company at a price of $9.90 per Preferred Share to yield 5.55%. The offering will be led by National Bank Financial Inc., CIBC Capital Markets and BMO Capital Markets.

The closing price on the TSX of each of the Preferred Shares and the Class A Shares on April 6, 2018 was $10.11 and $10.36, respectively. The closing price on the TSX of the SCITI Trust units on April 5, 2018 was $7.52.

Since inception of the Company, the aggregate dividends paid on the Preferred Shares have been $7.51 per share and the aggregate dividends paid on the Class A Shares have been $17.64 per share, for a combined total of $25.15. All distributions to date have been made in tax advantaged eligible Canadian dividends or capital gains dividends.

The Company will not receive cash proceeds from the issuance of the Class A Shares. In consideration for issuing each Class A Share, the Company will receive 1.17614 units of SCITI Trust. The investment fund manager of SCITI Trust confirmed on March 21, 2018 that SCITI Trust would be terminating on its scheduled termination date of April 30, 2018. At that time, SCITI Trust will distribute to its unitholders, including the Company to the extent it acquires SCITI Trust units under the Exchange Offer, the net asset value of SCITI Trust in cash.

The net proceeds of the offering, consisting of the net cash proceeds from the issuance of the Preferred Shares, and the net cash proceeds received on the wind-up of SCITI Trust in respect of the SCITI Trust units received as consideration for the issuance of the Class A Shares, 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 5.50% 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 the Exchange Offer will end at 5:00 p.m. EST on April 16, 2018. The Exchange Offer is expected to close on or about April 24, 2018 and is subject to certain closing conditions including approval by the TSX.

The sales period for the offering of Preferred Shares will end at 9:00 a.m. EST on April 24, 2018. The offering of Preferred Shares is expected to close on or about April 30, 2018. The offering is subject to certain closing conditions including approval by the TSX.

The press release issued by SCITI Trust on March 21 makes no mention of the potential for an exchange offer.

Scotia Managed Companies Administration Inc. (the “Manager”) confirmed today that SCITI Trust (the “Trust”) (TSX: SIN.UN) will terminate on its scheduled termination date of April 30, 2018 (the “Termination Date”). The last day on which the Trust’s units will trade on the Toronto Stock Exchange (the “TSX”) is April 26, 2018.

After the close of business on the Termination Date, the Trust will distribute to its unitholders their pro rata share of the net assets of the Trust, being the net asset value per unit as of the close of business on the Termination Date after paying its final distribution. Prior to the Termination Date, the Trust will liquidate all of its assets.

This entry was posted on Saturday, April 14th, 2018 at 9:49 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.