PrefBlog

Strathbridge Asset Management has announced:

Premium Income Corporation (the “Fund”) is pleased to announce that it is undertaking an overnight treasury offering of Preferred Shares and Class A Shares.

The sales period for the overnight offering will end at 9:00 am EST tomorrow, January 15, 2019. The offering is expected to close on or about January 22, 2019 and is subject to certain conditions including approval by the Toronto Stock Exchange (“TSX”).The Preferred Shares will be offered at a price of $14.60 per Preferred Share to yield 6.27% and the Class A Shares will be offered at an indicative price of $6.40 per Class A Share to yield 12.7%. The trading price on the TSX for each of the Preferred Shares and Class A Shares as at 2:45pm EST on January 14, 2019 was $14.59 and $6.57, respectively.

Since the inception of the Fund, the aggregate dividends declared on the Preferred Shares have been $19.40 per share and the aggregate dividends declared on the Class A Shares have been $24.81 per share, for a combined total of $44.21 per unit.

The Fund invests in a portfolio consisting principally of common shares of Bank of Montreal, The Bank of Nova Scotia, Canadian Imperial Bank of Commerce, National Bank of Canada, Royal Bank of Canada and The Toronto-Dominion Bank (the “Banks”). To generate additional returns above the dividend income earned on the Fund’s portfolio, the Fund will selectively write covered call and put options in respect of some or all of the common shares in the Fund’s portfolio. The manager and investment manager of the Fund is Strathbridge Asset Management Inc.

The Preferred Shares pay fixed cumulative preferential quarterly cash distributions in the amount of $0.215625 ($0.8625 per annum) per preferred share representing a yield of 5.75% on the original issue price of $15.00. The Class A Shares currently pay quarterly distributions in the amount $0.20319 ($0.81276 per annum) per Class A Share.

The syndicate of agents for the offering is being co-led by RBC Capital Markets, CIBC Capital Markets, National Bank Financial Inc. and Scotiabank, and also includes BMO Capital Markets, TD Securities Inc., Raymond James Ltd., Canaccord Genuity Corp., Desjardins Securities Inc., Echelon Wealth Partners Inc., GMP Securities L.P. and Industrial Alliance Securities Inc.

For further information, please contact Investor Relations at 416.681.3966, toll free at 1.800.725.7172, email at info@strathbridge.com or visit www.strathbridge.com

So the offering price is $21.00 per Whole Unit, compared to the January 10 NAVPU of 20.34 – a premium of just over 3%. Well … it’s not as bad a some of the offerings we’ve seen, eh?

Update, 2019-1-15: They raised almost 15-million:

Premium Income Corporation (the “Fund”) is pleased to announce a successful overnight treasury offering of 694,000 Preferred Shares and 694,000 Class A Shares. Gross proceeds of the offering are expected to be approximately $14.6 million.

The offering is expected to close on or about January 22, 2019 and is subject to certain conditions including approval by the Toronto Stock Exchange (“TSX”). The Preferred Shares were offered at a price of $14.60 per Preferred Share and the Class A Shares were offered at a price of $6.40 per Class A Share.

This entry was posted on Monday, January 14th, 2019 at 11:09 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.