Quadravest has announced:
Dividend 15 Split Corp. (the “Company”) is pleased to announce it will undertake an offering of Preferred Shares of the Company.
The offering will be led by National Bank Financial Inc.
The Preferred Shares will be offered at a price of $10.10 per Preferred Share to yield 5.45%.
The closing price on the TSX of the Preferred Shares on November 20, 2020 was $10.19.
Since inception of the Company, 200 consecutive dividends have been declared for the Preferred Shares. The aggregate dividends paid on the Preferred Shares have been $8.80 per share. All distributions to date have been made in tax advantage eligible Canadian dividends.
The net proceeds of the offering will be used by the Company to invest in an actively managed, high quality portfolio consisting of 15 dividend yielding Canadian companies as follows:
Bank of Montreal Enbridge Inc. TC Energy The Bank of Nova Scotia Manulife Financial Corp. TELUS Corporation BCE Inc. National Bank of Canada Thomson Reuters Corp. Canadian Imperial Bank of Commerce Royal Bank of Canada The Toronto-Dominion Bank CI Financial Corp. Sun Life Financial Inc. TransAlta Corporation The Company’s investment objectives are:
- Preferred Shares:
- to provide holders of the Preferred Shares with fixed, cumulative preferential monthly cash dividends in the amount of 5.50% annually; and
- on or about the termination date, currently December 1, 2024 (subject to further 5-year extensions thereafter and it has been extended in the past), to pay the holders of the Preferred Shares $10.00 per Preferred Share.
The sales period of this overnight offering will end at 9:00 a.m. EST on November 24, 2020. The offering is expected to close on or about November 30, 2020 and is subject to certain closing conditions including approval by the TSX.
It’s very unusual to see Split Corporation preferred shares issued without attached Capital Units. Presumably this is being done to offset ATM sales of the Capital Units.
Update, 2020-11-24: They have further announced:
Dividend 15 Split Corp. (the “Company”) is pleased to announce it has completed the overnight offering of 1,000,000 Preferred Shares of the Company. Total gross proceeds of the offering were $10.1 million, bringing the Company’s net assets to approximately $894.6 million.
The offering was led by National Bank Financial Inc.
The sales period of the overnight offering has now ended.
The offering is expected to close on or about November 30, 2020 and is subject to certain closing conditions including approval by the TSX.
The Preferred Shares were offered at a price of $10.10 per Preferred Share to yield 5.45%.
The closing price on the TSX of the Preferred Shares on November 23, 2020 was $10.22.
“It’s very unusual to see Split Corporation preferred shares issued without attached Capital Units. Presumably this is being done to offset ATM sales of the Capital Units.” I agree. I did some digging. DFN can do more sales of the capital units through the ATM facility since on the tsx DFN trades roughly 3 X more volume than DFN.PR.A. The limit for ATM is 25% of the average TSX volume (I think). I find this supply/demand situation fascinating to watch!