RS.PR.A To Be Extended

Middlefield Group has announced (on 2025-8-13):

– (TSX: RS, RS.PR.A) Real Estate Split Corp. (the “Company”) is pleased to announce that the board of directors intends to approve an extension of the maturity date of the Company for an additional 5-year term to December 31, 2030. The preferred share distribution rate for the extended term will be announced at least 60 days prior to the original maturity date of December 31, 2025, and will be based on market yields for preferred shares with similar terms at that time.

The term extension allows Class A shareholders to continue to gain exposure to a diversified portfolio, actively managed, high conviction portfolio comprised of securities of leading North American real estate companies.

The extension of the term of the Company is not a taxable event and enables shareholders to defer potential capital gains tax liability that would have otherwise been realized on the redemption of the Class A shares or Preferred Shares at the end of the term, until such time as such shares are disposed of by shareholders.

Since inception on November 19, 2020, the Class A shares have delivered a 5.4% per annum total return, including cash distributions of $6.94 per share. Class A shareholders also have the option to reinvest their cash distributions in a dividend reinvestment plan which is commission free to participants.

The term extension will offer Preferred shareholders the opportunity to enjoy preferential cash dividends until December 31, 2030. Since inception, the Preferred shares have delivered a 5.3% per annum total return.

The sole (preferred) issue affected is RS.PR.A .

Note that according to the 2024 Annual Information Form:

On the Maturity Date and upon any subsequent maturity date as determined by the Board of Directors, a holder of Preferred Shares may retract such Preferred Shares. The Fund will provide at least 60 days’ notice to holders of Preferred Shares of such right. The Preferred Shares must be surrendered for retraction by 5:00 p.m. (Toronto time) on the last business day of the month prior to the Maturity Date or subsequent maturity date, as applicable. The retraction price payable by the Fund for a Preferred Share pursuant to the non-concurrent retraction right will be equal to the lesser of (i) $10.00 plus any accrued and unpaid distributions thereon and (ii) the Net Asset Value of the Fund on that date divided by the total number of Preferred Shares then outstanding.

Note that the managers’ objective will be to minimize retractions in order to keep assets in the fund; they have no incentive to target a price following the reset announcement in excess of $10 per preferred share, other than an uncertainty buffer to ensure they don’t actually fall below it. Holders are therefore urged to calculate yield with the assumption of a $10 market price following the announcement as it is possible that retraction will be the best option at that time.