PrefBlog

Brompton Group has announced:

As a result of strong long-term performance, Dividend Growth Split Corp. (the “Fund”) is pleased to announce that the board of directors has approved an extension of the maturity date of the Class A and Preferred shares of the Company. The current maturity date of November 28, 2019 will be extended for an additional period of three to five years. The new term and the proposed rate for the preferred share dividend for the new term will be announced at least 60 days prior to the current November 28, 2019 maturity date. The preferred share dividend rate for the extended term will be based on market yields for preferred shares with similar terms at that time.

The extension of the term of the Fund is not expected to be a taxable event and should enable shareholders to defer potential capital gains tax liability that would have otherwise been realized on the redemption of the Class A shares or Preferred Shares at the end of the term until such time as such shares are disposed of by shareholders.
Since inception in December 2007 to August 31, 2018, the Class A share has delivered a 7.4%(1) per annum return, which outperformed the S&P/TSX Composite Index by 2.7% per annum. Since inception to August 31, 2018, Class A shareholders have received cash distributions of $12.39. Class A shareholders also have the option to reinvest their cash distributions in a dividend reinvestment plan which is commission free to participants. Class A shareholders can enroll in the DRIP program by contacting their investment advisor.

The term extension offers Preferred shareholders the opportunity to enjoy preferential cash dividends until the end of the extended term. Since inception to August 31, 2018, the Preferred share has delivered a 5.4% (1) per annum return.

The Fund invests, on an approximately equally-weighted basis, in a portfolio consisting primarily of equity securities of Canadian dividend growth companies. In addition, DGS may hold up to 20% of the total assets of the portfolio in global dividend growth companies for diversification and potentially enhanced return potential.

DGS.PR.A approved a term extension in 2011 which became official in 2013 and took effect in 2014 (these guys like to plan ahead!) with the dividend rate unchanged at 5.25%. The manager’s mandate expanded slightly in August, 2018.

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

This entry was posted on Friday, September 28th, 2018 at 8:18 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.