Mulvihill Capital Management Inc. has announced:
Premium Income Corporation (the “Fund”) is pleased to announce that in connection with the special retraction right granted to shareholders arising as a result of the extension of the term of the Fund to November 1, 2031, the Fund is announcing a consolidation of its Class A shares effective the opening of trading on or about November 12, 2024. As more Preferred shares than Class A shares were retracted on the special retraction, the consolidation will ensure that an approximately equal number of Class A shares and Preferred shares will be outstanding immediately following the consolidation. Under the consolidation, each Class A share will be consolidated into approximately 0.67 of a Class A share. The total value of a shareholder’s investment in Class A shares will not change, however, the number of Class A shares reflected in the shareholder’s account will decline and the net asset value per Class A share will increase proportionately. The consolidation is subject to regulatory approval. No fractional shares will be issued and shareholders are not required to take any action for the consolidation to be effective.
In addition, the Fund is pleased to announce that distributions on the Class A shares will be paid monthly instead of quarterly commencing in November 2024. Monthly distributions are expected to be $0.08 per Class A share or $0.96 per share per annum (compared to the previous rate of $0.81276 per annum). Holders of Class A shares will continue to receive ongoing leveraged exposure to a high-quality portfolio consisting principally of common shares of Bank of Montreal, The Bank of Nova Scotia, Canadian Imperial Bank of Commerce, National Bank of Canada and The Toronto-Dominion Bank. Holders of the Preferred shares are expected to continue to benefit from fixed cumulative preferential monthly distributions in the amount of $0.10625 ($1.275 per annum) per Preferred share representing a yield of 8.5% on the original issue price of $15.00 per share.
For further information, please contact Investor Relations at 416.681.3966, toll free at 1.800.725.7172, email at info@mulvihill.com or visit www.mulvihill.com
It will be remembered that the Capital Units could also be retracted; so the 33% excess preferred share retraction is on top of the number that were retracted in equal numbers to the Capital Units. And all this, despite the dividend boost to 8.50%!
Thanks to Assiduous Reader newbiepref for bringing this to my attention!
I enjoy how they are “pleased to announce” their fund getting smaller.
They’re now doing an overnight offering looking for new buyers of PIC.PR.A. Not sure what happens then – if this adjusts the consolidation ratio or they’ll issue more PIC.A or what.
https://www.globenewswire.com/news-release/2024/10/29/2971171/0/en/Premium-Income-Corporation-Announces-Overnight-Offering-of-Preferred-Shares.html
Also CIBC did an LRCN. It brought joy to CM.PR.P and CM.PR.Q.
https://cibc.mediaroom.com/2024-10-29-CIBC-to-Issue-6-950-NVCC-AT1-Limited-Recourse-Capital-Notes
In February 2024 I counted 34 Bank NVCC resets.
Now, with BMO.PR.W gone by the end of November, we’ll be down to 22.
And that’s before any potential action with the CM’s.
Re PIC, according to their website, as of Jul 31/24, the fund’s top holdings consisted of 60.4% “Cash and Short Term”.
https://mulvihill.com/PIC
Rather out of date, I know, but it seems to me rather difficult to meet the dividend requirements of both the capital shares and pref shares if most of the fund is invested in cash. Must be so difficult to update the website with more recent holdings.
Maybe this was just a very short term position….the fund managers were probably just being very clever!