Brompton Group has announced:
Brompton Split Banc 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).
The sales period for this overnight offering will end at 9:00 a.m. (ET) on Wednesday, February 20, 2019. The offering is expected to close on or about March 1, 2019 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 $13.55 per Class A Share for a distribution rate of 8.9% 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 5.25%.(1) The closing price on the TSX for each of the Class A and Preferred Shares on February 15, 2019 was $13.60 and $10.18, 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 February 14, 2019), as adjusted for dividends and certain expenses to be accrued prior to or upon settlement of the offering.
The Company invests in a portfolio (the “Portfolio”) consisting of common shares of the six largest Canadian banks: currently The Bank of Nova Scotia, National Bank of Canada, The Toronto-Dominion Bank, Canadian Imperial Bank of Commerce and Bank of Montreal. In addition, the Company may hold up to 10% of the total assets of the Portfolio in investments in global financial companies for the purpose of enhanced diversification and return potential.
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 $0.12500 per Preferred Share, and to return the original issue price plus accrued dividends (if any) to holders of Preferred Shares on November 29, 2022.
The syndicate of agents for the offering is being led by RBC Capital Markets, CIBC Capital Markets, National Bank Financial Inc. and Scotiabank.
…
Brompton Split Banc Corp.
Compound Annual NAV Returns to January 31, 2019. |
1-Yr |
3-Yr |
5-Yr |
10-Yr |
S.I. |
| Class A Shares (TSX: SBC) |
(23.1%) |
13.0% |
10.1% |
25.1% |
9.3% |
| S&P/TSX Capped Financials Index |
(2.2%) |
11.9% |
9.4% |
13.9% |
7.9% |
| S&P/TSX Composite Index |
0.5% |
9.8% |
5.6% |
9.1% |
5.9% |
| Preferred Shares (TSX: SBC.PR.A) |
5.1% |
4.8% |
4.7% |
5.0% |
5.1% |
| S&P/TSX Preferred Share Index |
(9.8%) |
7.5% |
0.1% |
3.8% |
1.7% |
| Brompton Split Banc Corp. – Unit |
(12.8%) |
9.4% |
7.8% |
13.5% |
7.3% |
SBC.PR.A was added to the HIMIPref™ universe in May 2008 as a SplitShare, paying 5.25% and maturing 2012-11-30. A five year extension to 2017-12-1 was approved in March 2012 at a dividend rate of 4.50%. A further extension to 2022-11-29 with a rate hike to 5.00% was announced in September 2017.
The NAV as of February 14 is now 12.54 for the Capital Units and 10.06 for the Preferreds for a total Unit Value of 22.60; the new units are being offered at a total of 23.55, so the premium on this offering is about 4.2%. Ah, what a great business it is when it works!
Those inclined to be particularly impressed by the performance table in the press release are reminded that SBC has been constrained to invest only in banks for most of its existence (the mandate was recently relaxed a little ), so the appropriate benchmark would be an equally weighted index of the Big Six banks, not the broader S&P/TSX Capped Financials Index. The BMO Equal Weight Banks Index ETF has an MER of 0.62% (on $1.4-billion, wow!) compared to 0.97% for SBC / SBC.PR.A in 2017.
Update, 2019-3-10: They raised about $20.5-million:
Brompton Split Banc Corp. (the “Company”) is pleased to announce that it has completed the previously announced treasury offering of class A shares and preferred shares (the “Class A Shares” and “Preferred Shares”, respectively) for aggregate gross proceeds of approximately $20.5 million. The Class A Shares and Preferred Shares will continue to trade on the Toronto Stock Exchange under the existing symbols SBC (Class A Shares) and SBC.PR.A (Preferred Shares).
This entry was posted on Tuesday, February 19th, 2019 at 7:50 pm and is filed under Issue Comments. You can follow any responses to this entry through the RSS 2.0 feed.
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SBC.PR.A To Get Bigger
Brompton Group has announced:
SBC.PR.A was added to the HIMIPref™ universe in May 2008 as a SplitShare, paying 5.25% and maturing 2012-11-30. A five year extension to 2017-12-1 was approved in March 2012 at a dividend rate of 4.50%. A further extension to 2022-11-29 with a rate hike to 5.00% was announced in September 2017.
The NAV as of February 14 is now 12.54 for the Capital Units and 10.06 for the Preferreds for a total Unit Value of 22.60; the new units are being offered at a total of 23.55, so the premium on this offering is about 4.2%. Ah, what a great business it is when it works!
Those inclined to be particularly impressed by the performance table in the press release are reminded that SBC has been constrained to invest only in banks for most of its existence (the mandate was recently relaxed a little ), so the appropriate benchmark would be an equally weighted index of the Big Six banks, not the broader S&P/TSX Capped Financials Index. The BMO Equal Weight Banks Index ETF has an MER of 0.62% (on $1.4-billion, wow!) compared to 0.97% for SBC / SBC.PR.A in 2017.
Update, 2019-3-10: They raised about $20.5-million:
This entry was posted on Tuesday, February 19th, 2019 at 7:50 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.