PrefBlog

Brompton Group has announced (on December 8):

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, December 9, 2021. The offering is expected to close on or about December 15, 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 $6.80 per Class A Share for a distribution rate of 17.6% 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 5.6%. (1) The closing market price on the TSX for each of the Class A Shares and Preferred Shares on December 7, 2021 was $7.00 and $10.11, 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 December 2, 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 portfolio (the “Portfolio”) consisting primarily of equity securities of Canadian dividend growth companies. In addition, the Company may hold up to 20% of the total assets of the Portfolio in global dividend growth companies for diversification and improved return potential, at the discretion of 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, each dividend growth company included in the Portfolio must have (i) a market capitalization of at least CDN$2.0 billion; and (ii) 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 targeted to be at least $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 $0.1375 per Preferred Share, and to return the original issue price to holders of Preferred Shares on September 27, 2024.

So the Whole Units were offered for 16.80, while the NAVPU on December 2 was 16.01, a 4.9% premium. I love this business!

Today, Brompton 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 $76.4 million. The offering is expected to close on or about December 15, 2021 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.

Thanks to Assiduous Reader JD for ensuring I was aware of this!

This entry was posted on Thursday, December 9th, 2021 at 10:45 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.