PrefBlog

Quadravest has announced:

Canadian Life Companies Split Corp. (“the
Company”) is pleased to announce a stock split of its Class A shares. The Class A shareholders of record date at the close of business on December 19, 2024 will receive an additional 10 post-split shares for every 100 Class A shares they hold. The stock split is subject to approval by the Toronto Stock Exchange (the “TSX”).

Class A shareholders will continue to receive regular monthly cash distributions targeted to be $0.10 per share following the stock split, resulting in an increase in total distributions to be received of approximately 14%.

The Class A shares are expected to commence trading on an ex-split basis at the opening of trading on December 19, 2024. No fractional Class A shares will be issued, and the number of Class A shares each holder shall receive will be rounded down to the nearest whole number. The stock split is a non-taxable event.

The recent extension of the Company’s termination date included a retraction right for Class A shareholders and Preferred shareholders. Upon completion of the stock split, all retractions have been satisfied and no further action will be taken.

The impact of the stock split will be reflected in the next reported net asset value per unit as at December 31, 2024.

The Company invests in a portfolio of four publicly traded Canadian life insurance companies as follows: Great‐West Lifeco Inc., Industrial Alliance Insurance & Financial Services Inc., Manulife Financial Corporation and Sun Life Financial Inc.

Details of the dividend increase for LFE.PR.B on extension were previously reported on PrefBlog.

As noted by Assiduous Reader IrateAR, this implies that more Capital Units were retracted than preferred shares, which makes sense since the Capital Units have been trading at a discount to intrinsic, while the preferreds have been trading at a premium to par.

I was intrigued by an assertion in the press release and sent the following message to Quadravest just before noon today, but have not yet received an answer:

Your press release today claims that “Class A shareholders will continue to receive regular monthly cash distributions targeted to be $0.10 per share following the stock split, resulting in an increase in total distributions to be received of approximately 14%. ”

I do not understand how the 14% figure is derived. The LFE distributions are targetted to increase by 10% due to the 11-new-for-10-old split, while the maximum rate on LFE.PR.B has increased by 12.5% (from 8% to 9%) and the minimum by about 7.7% (from 6.5% to 7%).

It is not clear to me how this results in an increase in total distributions to be received of approximately 14%.

Sincerely,

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

Update, 2024-12-18: Quadravest has issued a correction:

– Canadian Life Companies Split Corp. (“the Company”) is pleased to announce a stock split of its Class A shares. The Class A shareholders of record date at the close of business on December 19, 2024 will receive an additional 10 post-split shares for every 100 Class A shares they hold. The stock split is subject to approval by the Toronto Stock Exchange (the “TSX”).

Class A shareholders will continue to receive regular monthly cash distributions targeted to be $0.10 per share following the stock split, resulting in an increase in total distributions to be received of approximately 10%.

The Class A shares are expected to commence trading on an ex-split basis at the opening of trading on December 19, 2024. No fractional Class A shares will be issued, and the number of Class A shares each holder shall receive will be rounded down to the nearest whole number. The stock split is a non-taxable event.

The recent extension of the Company’s termination date included a retraction right for Class A shareholders and Preferred shareholders. Upon completion of the stock split, all retractions have been satisfied and no further action will be taken.

The impact of the stock split will be reflected in the next reported net asset value per unit as at December 31, 2024.

The Company invests in a portfolio of four publicly traded Canadian life insurance companies as follows: Great‐West Lifeco Inc., Industrial Alliance Insurance & Financial Services Inc., Manulife Financial Corporation and Sun Life Financial Inc.

This entry was posted on Tuesday, December 17th, 2024 at 9:56 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.