PrefBlog

Purpose Investments has announced:

Big Banc Split Corp. (the “Company”) is pleased to announce that the board of directors of the Company has approved an extension of the maturity date of the Company’s class A shares (“Class A Shares”) and preferred shares (“Preferred Shares”) for an additional 3-year term to November 30, 2026 (the “New Term”) along with a significant increase in distribution rates for both Class A Shares and Preferred Shares. Effective December 1, 2023, the monthly distribution on Class A Shares will increase to $0.12 per Class A Share (or $1.44 per annum), representing a 14.8% yield per annum based on the closing price as at September 28, 2023. The monthly distributions on Preferred Shares will increase to $0.07 ($0.84 per annum), representing an 8.4% yield on the par value of $10.00 per Preferred Share (the “Preferred Share Distribution Rate”). Purpose Investments Inc. (“Purpose”) is the manager, portfolio manager and promoter of the Company and provides all administrative services required by the Company.

“Having carefully assessed the portfolio of the Company and its yield-generating potential, we are pleased to provide shareholders with an extension of the Company’s maturity date, along with material increases in monthly distribution rates on both the Class A Shares and Preferred Shares,” said Vlad Tasevski, Head of Asset Management and Head of Investors and Institutional Partners at Purpose Investments Inc. “We believe the Preferred Shares offer a very competitive combination of attractive monthly distributions and downside protection, while the Class A shares combine the opportunity for an enhanced capital appreciation with an attractive double-digit distribution yield per annum. We believe this emphasis on yield is consistent with our medium-term market outlook for the Company’s Portfolio,” added Tasevski.

The Company invests on an approximately equally weighted basis in a portfolio (the “Portfolio”) of equity securities (the “Portfolio Shares”) of the following publicly traded Canadian banks: Bank of Montreal; Canadian Imperial Bank of Commerce; National Bank of Canada; Royal Bank of Canada; The Bank of Nova Scotia; and The Toronto-Dominion Bank. In order to seek additional returns and enhance the Portfolio’s income, Purpose Investments Inc. (“Purpose Investments”), the Company’s manager, may write covered call options and cash-covered put options in respect of some or all of the Portfolio Shares held in the Portfolio.

In connection with the extension, holders of Class A Shares and Preferred Shares who do not wish to continue their investment in the Company will be able to retract their Preferred Shares or Class A Shares, as applicable, on November 30, 2023, 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 Company were to terminate on November 30, 2023. Pursuant to this option, the retraction price may be less than the market price if the Class A Share or Preferred Share, as applicable, is trading at a premium to net asset value. To exercise this retraction right, shareholders must provide notice to their investment dealer by October 31, 2023, at 5:00 p.m. (Toronto time). Alternatively, shareholders may sell their Preferred Shares and/or Class A Shares through their securities dealer at 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 Class A Shares or Preferred Shares.

The NAVPU was 18.87 on 2023-10-3. With less than 1.4-million Units outstanding as of 2022-12-31, the fund is too small to be tracked by HIMIPref™.

Thanks to Assiduous Reader newbiepref for bringing this to my attention!

This entry was posted on Wednesday, October 4th, 2023 at 9:47 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.