) 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 Thursday, March 11, 2021. The offering is expected to close on or about March 18, 2021 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 $11.15 per Class A Share for a distribution rate of 10.8% on the issue price, and the Preferred Shares will be offered at a price of $10.20 per Preferred Share for a yield to maturity of 4.8%. The closing price on the TSX for each of the Class A Shares and Preferred Shares on March 9, 2021 was $11.32 and $10.44, 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 March 9, 2021), as adjusted for dividends and certain expenses to be accrued prior to or upon settlement of the offering. The offering is being led by RBC Capital Markets.
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.
The Company also announces that the distribution rate for the Preferred Shares of the Company for the 5 year term from July 1, 2021 to June 30, 2026 will remain unchanged at $0.50 per annum (5% on the original issue price of $10.00) payable quarterly. The Preferred Share distribution rate is based on current market rates for preferred shares with similar terms. In addition, the Company intends to maintain the targeted monthly Class A Share distribution rate at $0.10 per Class A Share. The Company previously announced the extension of the maturity date in respect of the Class A Shares and the Preferred Shares from June 30, 2021 to June 30, 2026. The term extension offers preferred shareholders the opportunity to enjoy preferential cash dividends until June 30, 2026.
Since inception to February 28, 2021, the Preferred Share has delivered a 5.1% per annum return.
Since inception to February 28, 2021, Class A shareholders have also received cash distributions of $3.25 per Class A Share. Class A shareholders have the option to benefit by reinvesting their cash distributions in a distribution reinvestment plan (“DRIP”) which is commission free to participants. Class A shareholders can enroll in this program by contacting their investment advisor.
In connection with the extension, shareholders who do not wish to continue their investment in the Fund, will be able to retract their Preferred Shares or Class A Shares on June 30, 2021 pursuant to a special retraction right and receive a retraction price that is calculated in the same way that such price would be calculated if the Fund were to terminate on June 30, 2021. Pursuant to this option, the retraction price may be less than the market price if the share is trading at a premium to net asset value. To exercise this retraction right shareholders must provide notice to their investment dealer by their dealer’s deadline which in any event cannot be later than May 31, 2021 at 5:00 p.m. (Toronto time). Alternatively, shareholders may sell their Preferred Shares and/or Class A
Shares through their securities dealer for the market price at any time, potentially at a higher price than would be achieved through retraction, or shareholders may take no action and continue to hold their shares.
GDV.PR.A Got Bigger
Brompton Funds announced (on 2021-3-10):
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