PrefBlog

Brompton Group has announced:

Life & Banc 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” and “Preferred Shares”, respectively). In addition to matched Class A Shares and Preferred Shares, the Company is offering up to 3.7 million Preferred Shares on an unmatched basis.

The sales period for this overnight offering will end at 9:00 a.m. (ET) on Tuesday, November 20, 2018. The offering is expected to close on or about December 3, 2018 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 $8.08 per Class A Share for a distribution rate of 14.8% 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 5.6%.(1) The closing price on the TSX for each of the Class A and Preferred Shares on November 16, 2018 was $8.29 and $10.05, 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 November 16, 2018), as adjusted for dividends and certain expenses to be accrued prior to or upon settlement of the offering.
The Company invests in a portfolio consisting of common shares of the six largest Canadian banks and the four major publicly traded 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 until November 29, 2018, increasing to $0.13625 per Preferred Share ($0.545 per annum) from November 30, 2018 to October 30, 2023; and to return the original issue price plus accrued dividends (if any) to holders of Preferred Shares on October 30, 2023.
The syndicate of agents for the offering is being led by RBC Capital Markets, CIBC Capital Markets, National Bank Financial Inc. and Scotiabank.

According to the fund’s web page the NAVPU was 17.57 as of November 15, so the Whole Unit offering price of 18.08 is a premium of about 2.9%.

On September 25, Brompton announced:

Life & Banc Split Corp. (the “Fund”) announces that the distribution rate for the Preferred Shares for the 5 year term from November 30, 2018 to October 30, 2023 will be $0.545 per annum (5.45% on the original issue price of $10) payable quarterly. The Preferred Share distribution rate is based on current market rates for preferred shares with similar terms. In addition, the Fund intends to maintain the targeted monthly Class A Share distribution rate at $0.10 per Class A Share. The Fund previously announced the extension of the term of the Class A Shares and the Preferred Shares from November 30, 2018 to October 30, 2023. The term extension offers Preferred shareholders the opportunity to enjoy preferential cash dividends until October 30, 2023. Since inception in October 2006 to August 31, 2018, the Preferred share has delivered a 5.2% per annum return.

Update, 2018-11-20: They raised about 58.4-million:

Life & Banc Split Corp. (the “Company”) is pleased to announce a successful overnight treasury offering of class A and preferred shares (the “Class A Shares” and “Preferred Shares”, respectively). Gross proceeds of the offering are expected to be approximately $58.4 million. The offering is expected to close on or about December 3, 2018 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, November 19th, 2018 at 10:04 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.