PrefBlog

Evolve Funds Group Inc. has announced (although not yet on its website):

on behalf of Gold Miners Split Corp. (the “Company”) is pleased to announce that it has filed a preliminary prospectus in relation to an initial public offering (the “Offering”) of preferred shares (the “Preferred Shares”) at a price of $10 per Preferred Share and class A shares (the “Class A Shares”) at a price of $15 per Class A Share.

The Company will invest in a portfolio (the “Portfolio”) comprised primarily of common shares of gold mining issuers included in the S&P/TSX Global Gold Index, the NYSE Arca Gold Miners Index and/or the MVIS Global Junior Gold Miners Index.

The investment objectives for the Preferred Shares are (i) to provide holders of Preferred Shares with cumulative preferential quarterly cash dividends, the amount of which is fixed by the board of directors of the Company in respect of each three-year term of the Company; and (ii) on May 31, 2022 (the “Termination Date”) to pay the holders of the Preferred Shares an amount per Preferred Share equal to $10.00 per Preferred Share (the “Preferred Share Repayment Amount”). The quarterly cash distribution will be $0.15 per Preferred Share ($0.60 per annum), representing a yield of 6.0% per annum on the issue price of $10.00 per Preferred Share until the Termination Date. The Preferred Shares will not be rated.

The investment objectives for the Class A Shares are to provide the holders with the opportunity for capital appreciation through exposure to the Portfolio by paying such holders, on or about the Termination Date, subject to extension for successive terms of three years as determined by the board of directors of the Company, such amounts as remain in the Company on the Termination Date after paying the Preferred Share Repayment Amount to the holders of the Preferred Shares.

Evolve, the manager of the Company, will provide investment advisory services and portfolio management services to the Company.

Prospective purchasers investing in the Company have the option of paying for: (i) Preferred Shares or Class A Shares in cash; or (ii) units comprised of one Preferred Share and one Class A Share or Class A Shares by exchanging securities of issuers listed in the preliminary prospectus (the “Exchange Option”). Prospective purchasers under the Exchange Option are required to deposit their exchange eligible securities prior to 5:00 p.m. (Toronto time) on May 10, 2019, in the manner described in the preliminary prospectus.

The syndicate of agents is being co-led by National Bank Financial Inc. and CIBC World Markets Inc., and includes BMO Nesbitt Burns Inc., RBC Dominion Securities Inc., Scotia Capital Inc., TD Securities Inc., Canaccord Genuity Corp., Industrial Alliance Securities Inc., Raymond James Ltd., Echelon Wealth Partners Inc., GMP Securities L.P., Desjardins Securities Inc., Mackie Research Capital Corporation Manulife Securities Incorporated and Wellington-Altus Private Wealth Inc.

A search on SEDAR finds the document “Gold Miners Split Corp. Apr 3 2019 4:30:13 ET Preliminary long form prospectus – English PDF 2691 K”, which I am not permitted to link to because the Canadian Securities Administrators consider this information to be secret, but which contains the following interesting information:

Currently, the Company will pay, as and when declared by the Board of Directors, a fixed cumulative preferential quarterly dividend of $0.15 per Preferred Share ($0.60 per annum or 6.0% per annum on the issue price of $10.00 per Preferred Share) to holders of Preferred Shares of record on the last business day of each quarter. From and after May 31, 2022, assuming the Termination Date of the Company is then extended beyond May 31, 2022, and in respect of each three-year extension, if any, thereafter, the Board of Directors shall determine the rate of cumulative preferential quarterly dividends to be paid on the Preferred Shares for the ensuing three-year period. Such determination shall be made at least 60 days prior to the extension of the term of the Company, failing which the then-applicable dividend rate shall continue to apply. The dividend rate will be announced by press release.
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Holders of Preferred Shares whose Preferred Shares are surrendered for retraction will be entitled to receive a retraction price per Preferred Share (the “Preferred Share Retraction Price”) equal to 96% of the lesser of (i) the NAV per unit consisting of one Preferred Share and one Class A Share (each, a “Unit”) determined as of such Retraction Date, less the cost to the Company of the purchase of a Class A Share for cancellation; and (ii) $10.00.
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On the Termination Date or subsequent termination date, a holder of Preferred Shares may retract such Preferred Shares. The Company will provide at least 60 days’ notice to holders of Preferred Shares of such right. The Preferred Shares must be surrendered for retraction by 5:00 p.m. (Toronto time) on the last business day of the month prior to the Termination Date or subsequent termination date, as applicable.
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Holders of Class A Shares are entitled to receive any dividends that the Board of Directors may declare subject to the prior rights of the holders of Preferred Shares. If the Company realizes capital gains on the sale of Portfolio Securities and would be liable to pay tax thereon, the Company may declare a capital gains dividend on the Class A Shares.

No dividends or other distributions will be paid on the Class A Shares in any month as long as any dividends on the Preferred Shares are then in arrears or so long as the NAV per Unit is equal to or less than $15.00.

At this time, other than for tax purposes, the Board of Directors does not anticipate declaring dividends in respect of the Class A Shares.
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The Preferred Shares will not be rated by any credit rating agency.

As the shares will have no credit rating, they will not be tracked by HIMIPref™ when (if!) issued. As I always point out on such occasions, this is not because I can’t do it myself or because I worship the Credit Rating Agencies, but because a downgrade – or the threat of one – in an agency rating serves wonderfully to concentrate the minds of management and directors, in a way that no amount of fulminating of mine can hope to equal.

This entry was posted on Thursday, April 4th, 2019 at 8:57 pm and is filed under New Issues. 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.