We might be getting a new SplitShare fund:
Ninepoint Partners LP (“Ninepoint”) is pleased to announce that Canadian Large Cap Leaders Split Corp. (the “Company”) has filed a preliminary prospectus dated December 19, 2023 in connection with an initial public offering of preferred shares (“Preferred Shares”) and class A shares (“Class A Shares”). A receipt for the preliminary prospectus has been issued by the securities regulatory authorities in each of the provinces and territories of Canada.
The Company will invest in an initially equally-weighted portfolio comprised primarily of equity securities of Canadian Dividend Growth Companies (as defined below), selected by the portfolio manager, that at the time of investment and immediately following each periodic reconstitution and rebalancing: (i) are listed on a Canadian exchange; (ii) pay a dividend; (iii) generally have a market capitalization of at least $10 billion; (iv) have options in respect of its equity securities that, in the opinion of the portfolio manager, are sufficiently liquid to permit the portfolio manager to write options in respect of such securities; and (v) have a history of dividend growth or, in the portfolio manager’s view have high potential for future dividend growth (“Canadian Dividend Growth Companies”).
The preferreds have been provisionally rated Pfd-3(high) by DBRS
PerpetualDiscounts now yield 6.97%, equivalent to 9.06% interest at the standard equivalency factor of 1.3x. Long corporates yielded 5.03% on 2023-12-8 and since then the closing price has changed from 15.18 to 15.86, an increase of 448bp in price, with a Duration (BMO doesn’t specify Modified or Macaulay – I will assume the former) of 12.41 implying a decrease of 36bp in yield to 4.67%, so the pre-tax interest-equivalent spread (in this context, the “Seniority Spread”) has widened to 440bp from the 430bp reported December 13.
| HIMIPref™ Preferred Indices These values reflect the December 2008 revision of the HIMIPref™ Indices Values are provisional and are finalized monthly |
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| Index | Mean Current Yield (at bid) |
Median YTW |
Median Average Trading Value |
Median Mod Dur (YTW) |
Issues | Day’s Perf. | Index Value |
| Ratchet | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.0000 % | 2,164.4 |
| FixedFloater | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.0000 % | 4,151.4 |
| Floater | 11.25 % | 11.31 % | 55,252 | 8.64 | 2 | 0.0000 % | 2,392.5 |
| OpRet | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.0796 % | 3,371.2 |
| SplitShare | 4.98 % | 7.61 % | 58,197 | 1.76 | 8 | 0.0796 % | 4,025.9 |
| Interest-Bearing | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.0796 % | 3,141.2 |
| Perpetual-Premium | 0.00 % | 0.00 % | 0 | 0.00 | 0 | 0.2470 % | 2,533.4 |
| Perpetual-Discount | 6.79 % | 6.97 % | 62,375 | 12.51 | 33 | 0.2470 % | 2,762.5 |
| FixedReset Disc | 5.90 % | 7.89 % | 132,165 | 11.68 | 60 | -0.0530 % | 2,204.0 |
| Insurance Straight | 6.67 % | 6.79 % | 82,181 | 12.86 | 19 | 0.2125 % | 2,713.8 |
| FloatingReset | 10.73 % | 10.86 % | 34,696 | 8.94 | 3 | 0.8096 % | 2,461.9 |
| FixedReset Prem | 6.94 % | 6.76 % | 180,292 | 12.54 | 1 | 0.0000 % | 2,521.3 |
| FixedReset Bank Non | 0.00 % | 0.00 % | 0 | 0.00 | 0 | -0.0530 % | 2,252.9 |
| FixedReset Ins Non | 5.78 % | 7.49 % | 104,172 | 12.36 | 14 | 0.3622 % | 2,460.6 |
| Performance Highlights | |||
| Issue | Index | Change | Notes |
| BIK.PR.A | FixedReset Disc | -4.64 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-12-20 Maturity Price : 21.17 Evaluated at bid price : 21.17 Bid-YTW : 8.66 % |
| RY.PR.S | FixedReset Disc | -3.74 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-12-20 Maturity Price : 21.74 Evaluated at bid price : 22.15 Bid-YTW : 6.50 % |
| BN.PF.J | FixedReset Disc | -2.27 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-12-20 Maturity Price : 18.91 Evaluated at bid price : 18.91 Bid-YTW : 8.48 % |
| SLF.PR.C | Insurance Straight | -1.91 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-12-20 Maturity Price : 17.50 Evaluated at bid price : 17.50 Bid-YTW : 6.39 % |
| GWO.PR.Y | Insurance Straight | -1.75 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-12-20 Maturity Price : 16.80 Evaluated at bid price : 16.80 Bid-YTW : 6.74 % |
| PWF.PF.A | Perpetual-Discount | -1.63 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-12-20 Maturity Price : 16.34 Evaluated at bid price : 16.34 Bid-YTW : 7.02 % |
| CIU.PR.A | Perpetual-Discount | -1.35 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-12-20 Maturity Price : 16.77 Evaluated at bid price : 16.77 Bid-YTW : 6.95 % |
| TD.PF.C | FixedReset Disc | -1.29 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-12-20 Maturity Price : 17.55 Evaluated at bid price : 17.55 Bid-YTW : 7.90 % |
| FFH.PR.M | FixedReset Disc | -1.06 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-12-20 Maturity Price : 21.47 Evaluated at bid price : 21.47 Bid-YTW : 8.33 % |
| FTS.PR.G | FixedReset Disc | 1.03 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-12-20 Maturity Price : 19.70 Evaluated at bid price : 19.70 Bid-YTW : 7.28 % |
| BN.PR.Z | FixedReset Disc | 1.04 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-12-20 Maturity Price : 18.40 Evaluated at bid price : 18.40 Bid-YTW : 8.52 % |
| MFC.PR.I | FixedReset Ins Non | 1.05 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-12-20 Maturity Price : 21.81 Evaluated at bid price : 22.15 Bid-YTW : 6.97 % |
| CCS.PR.C | Insurance Straight | 1.18 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-12-20 Maturity Price : 18.94 Evaluated at bid price : 18.94 Bid-YTW : 6.64 % |
| BN.PF.G | FixedReset Disc | 1.27 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-12-20 Maturity Price : 15.91 Evaluated at bid price : 15.91 Bid-YTW : 9.23 % |
| BMO.PR.Y | FixedReset Disc | 1.38 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-12-20 Maturity Price : 18.33 Evaluated at bid price : 18.33 Bid-YTW : 7.85 % |
| MFC.PR.B | Insurance Straight | 1.49 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-12-20 Maturity Price : 18.36 Evaluated at bid price : 18.36 Bid-YTW : 6.38 % |
| FFH.PR.D | FloatingReset | 1.55 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-12-20 Maturity Price : 19.70 Evaluated at bid price : 19.70 Bid-YTW : 10.57 % |
| BN.PF.E | FixedReset Disc | 1.90 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-12-20 Maturity Price : 15.00 Evaluated at bid price : 15.00 Bid-YTW : 9.50 % |
| GWO.PR.P | Insurance Straight | 1.93 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-12-20 Maturity Price : 20.12 Evaluated at bid price : 20.12 Bid-YTW : 6.75 % |
| BIP.PR.E | FixedReset Disc | 2.44 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-12-20 Maturity Price : 21.00 Evaluated at bid price : 21.00 Bid-YTW : 7.69 % |
| BN.PF.B | FixedReset Disc | 2.54 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-12-20 Maturity Price : 17.35 Evaluated at bid price : 17.35 Bid-YTW : 8.64 % |
| SLF.PR.H | FixedReset Ins Non | 2.58 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-12-20 Maturity Price : 15.50 Evaluated at bid price : 15.50 Bid-YTW : 8.10 % |
| BIP.PR.A | FixedReset Disc | 4.37 % | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-12-20 Maturity Price : 16.71 Evaluated at bid price : 16.71 Bid-YTW : 9.86 % |
| Volume Highlights | |||
| Issue | Index | Shares Traded |
Notes |
| TD.PF.I | FixedReset Disc | 204,744 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-12-20 Maturity Price : 22.96 Evaluated at bid price : 24.20 Bid-YTW : 6.60 % |
| CU.PR.C | FixedReset Disc | 114,327 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-12-20 Maturity Price : 17.96 Evaluated at bid price : 17.96 Bid-YTW : 7.89 % |
| TD.PF.B | FixedReset Disc | 114,255 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-12-20 Maturity Price : 19.19 Evaluated at bid price : 19.19 Bid-YTW : 7.33 % |
| RY.PR.Z | FixedReset Disc | 94,755 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-12-20 Maturity Price : 18.95 Evaluated at bid price : 18.95 Bid-YTW : 7.35 % |
| TD.PF.A | FixedReset Disc | 84,709 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-12-20 Maturity Price : 18.35 Evaluated at bid price : 18.35 Bid-YTW : 7.57 % |
| POW.PR.D | Perpetual-Discount | 79,935 | YTW SCENARIO Maturity Type : Limit Maturity Maturity Date : 2053-12-20 Maturity Price : 18.38 Evaluated at bid price : 18.38 Bid-YTW : 6.96 % |
| There were 34 other index-included issues trading in excess of 10,000 shares. | |||
| Wide Spread Highlights | ||
| Issue | Index | Quote Data and Yield Notes |
| IFC.PR.E | Insurance Straight | Quote: 19.25 – 20.70 Spot Rate : 1.4500 Average : 0.8879 YTW SCENARIO |
| PWF.PR.T | FixedReset Disc | Quote: 19.11 – 20.65 Spot Rate : 1.5400 Average : 1.0197 YTW SCENARIO |
| BN.PF.F | FixedReset Disc | Quote: 16.15 – 18.00 Spot Rate : 1.8500 Average : 1.4228 YTW SCENARIO |
| BMO.PR.W | FixedReset Disc | Quote: 17.06 – 18.50 Spot Rate : 1.4400 Average : 1.0223 YTW SCENARIO |
| SLF.PR.H | FixedReset Ins Non | Quote: 15.50 – 17.89 Spot Rate : 2.3900 Average : 2.0927 YTW SCENARIO |
| GWO.PR.P | Insurance Straight | Quote: 20.12 – 20.98 Spot Rate : 0.8600 Average : 0.5706 YTW SCENARIO |
[…] PerpetualDiscounts now yield 6.96%, equivalent to 9.05% interest at the standard equivalency factor of 1.3x. Long corporates yielded 4.72% on 2023-12-15 and since then the closing price has changed from 15.88 to 15.70, a decline of 69bp in price, with a Duration (BMO doesn’t specify Modified or Macaulay – I will assume the former) of 12.60 implying an increase of 5bp in yield to 4.77%, so the pre-tax interest-equivalent spread (in this context, the “Seniority Spread”) has narrowed to 430bp from the 440bp reported December 20. […]
ello guys!
Does anyone have an opinion about this new splitshare fund?
After the pref rally of the last few weeks the yield of 7.5% for 5 years is I believe pretty appealing, besides the downside protection will be one the highest currently available (should be 60% if I’m not mistaken in the way it is calculated ah ah).
Sure, it is, as always, mostly banks and energy but we live in Canada so… not much choice to get yield.
I’ve enquired my bank about making a purchase but they told me that since no final prospectus has been issued, they can’t do anything.
I’m not too familiar with how things work in such situation but I guess I’ll have to wait.
I may be wrong but I believe the price will be somewhat higher than $10 when it starts trading.
Thanks!
As you said, it will have good downside protection initially, but my concern would be lack of liquidity, How much do they think that they can sell with the initial offering? $50mm would be impressive I would think. That would leave a market cap for the prefs of about $20mm. Compare that for DFN.PR. which is north of $1 bio.
If you don’t mind getting marked-to-market at $8 on occasion, might not be too bad…
This new Split Share Fund has now been offered at TD (and I am sure others). 7.5% for the prefs. Can’t find a press release yet.
Ninepoint’s new split share fund is now trading, under the ticker symbols NPS and NPS.PR.A
https://www.ninepoint.com/about-ninepoint/press-releases/canadian-large-cap-leaders-split-corp-closes-initial-public-offering/
Small market cap (only 1.85mm shares of each of the cap and pref shares).
That’s a pretty decent start. Perhaps in a few years I’ll be able to add it to HIMIPref™.
[…] Partners LP was mentioned here on December 23, 2023 due to its efforts to introduce Canadian Large Cap Leaders Split Corp., which has made a decent […]