Brompton Group has announced:
Global Dividend Growth 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).
The sales period for this overnight offering will end at 9:00 a.m. (ET) on Wednesday, November 25, 2020. The offering is expected to close on or about December 2, 2020 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 $10.75 per Class A Share for a distribution rate of 11.2% 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 6.6%.(1) The closing price on the TSX for each of the Class A Shares and Preferred Shares on November 23, 2020 was $10.86 and $10.25, respectively. The Class A Share 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 (“Unit”) (calculated as at November 23, 2020), as adjusted for dividends and certain expenses to be accrued prior to or upon settlement of the offering.
The syndicate of agents for the offering is being led by RBC Capital Markets, CIBC Capital Markets, National Bank Financial Inc. and Scotiabank.
The Company is also pleased to announce that its board of directors has approved an extension of the maturity date of the Class A Shares and Preferred Shares of the Company for an additional 5-year term, to June 30, 2026. The Preferred Share dividend rate for the extended term will be announced at least 60 days prior to the original June 30, 2021 maturity date. The new dividend rate will be determined based on the market yields for Preferred Shares with similar terms.
The Company invests in a diversified portfolio (the “Portfolio”) of equity securities of large capitalization global dividend growth companies selected by the Brompton Funds Limited (the “Manager”). In order to qualify for inclusion in the Portfolio, at the time of investment and at the time of each periodic reconstitution and/or rebalancing of the Portfolio, each global dividend growth company included in the Portfolio must (i) have a market capitalization of at least $10 billion; and (ii) have a history of dividend growth or, in the Manager’s view, have high potential for future dividend growth.
The investment objectives for the Class A Shares are to provide holders with regular monthly cash distributions 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 $0.125 per Preferred Share, and to return the original issue price to holders of Preferred Shares on June 30, 2026.
So the new Units are being sold for 20.75, while the November 23 NAVPU is 19.92, for a premium of 4.2%. What a great business it is!
Update, 2020-11-26: The company has further announced:
a successful overnight treasury offering of class A shares and preferred shares (the “Class A Shares” and “Preferred Shares”, respectively). Gross proceeds of the offering are expected to be approximately $13.1 million. The offering is expected to close on or about December 2, 2020 and is subject to certain closing conditions. 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.