Financial 15 Split Corp. Announces Exchange Offering a High Quality Portfolio Consisting of 15 North American Financial Servi...
April 09 2018 - 8:30AM
Financial 15 Split Corp. (the “Company”) is pleased to announce it
will undertake an exchange offering for holders of units of SCITI
Trust whereby one Class A Share of the Company will be offered in
exchange for 1.17614 freely-tradable listed units of SCITI Trust
(the “Exchange Offer”). The maximum number of Class A Shares to be
issued by the Company in the Exchange Offer will be 2,917,000.
In conjunction with the Exchange Offer, the
Company will also undertake to offer up to 2,917,000 Preferred
Shares of the Company at a price of $9.90 per Preferred Share to
yield 5.55%. The offering will be led by National Bank Financial
Inc., CIBC Capital Markets and BMO Capital Markets.
The closing price on the TSX of each of the
Preferred Shares and the Class A Shares on April 6, 2018 was $10.11
and $10.36, respectively. The closing price on the TSX of the
SCITI Trust units on April 5, 2018 was $7.52.
Since inception of the Company, the aggregate
dividends paid on the Preferred Shares have been $7.51 per share
and the aggregate dividends paid on the Class A Shares have been
$17.64 per share, for a combined total of $25.15. All distributions
to date have been made in tax advantaged eligible Canadian
dividends or capital gains dividends.
The Company will not receive cash proceeds from
the issuance of the Class A Shares. In consideration for issuing
each Class A Share, the Company will receive 1.17614 units of SCITI
Trust. The investment fund manager of SCITI Trust confirmed on
March 21, 2018 that SCITI Trust would be terminating on its
scheduled termination date of April 30, 2018. At that time,
SCITI Trust will distribute to its unitholders, including the
Company to the extent it acquires SCITI Trust units under the
Exchange Offer, the net asset value of SCITI Trust in cash.
The net proceeds of the offering, consisting of
the net cash proceeds from the issuance of the Preferred Shares,
and the net cash proceeds received on the wind-up of SCITI Trust in
respect of the SCITI Trust units received as consideration for the
issuance of the Class A Shares, will be used by the Company to
invest in an actively managed, high quality portfolio consisting of
15 financial services companies made up of Canadian and U.S.
issuers as follows:
Bank of
Montreal |
National
Bank of Canada |
Bank of
America Corp. |
The Bank of
Nova Scotia |
Manulife
Financial Corporation |
Citigroup
Inc. |
Canadian
Imperial Bank of Commerce |
Sun Life
Financial Services of Canada Inc. |
Goldman
Sachs Group Inc. |
Royal Bank
of Canada |
Great-West
Lifeco Inc. |
JP Morgan
Chase & Co. |
The
Toronto-Dominion Bank |
CI
Financial Corp. |
Wells Fargo
& Co. |
The Company’s investment objectives are:
Preferred Shares:
- to provide holders of the Preferred Shares with fixed,
cumulative preferential monthly cash dividends currently in the
amount of 5.50% annually, to be set by the Board of Directors
annually subject to a minimum of 5.25% until 2020; and
- on or about the termination date, currently December 1, 2020
(subject to further 5 year extensions thereafter), to pay the
holders of the Preferred Shares $10.00 per Preferred Share.
Class A Shares:
- to provide holders of the Class A Shares with regular monthly
cash dividends in an amount to be determined by the Board of the
Directors; and
- to permit holders to participate in all growth in the net asset
value of the Company above $10 per Unit, by paying holders on or
about the termination date of December 1, 2020 (subject to further
5 year extensions thereafter) such amounts as remain in the Company
after paying $10 per Preferred Share.
The sales period of the Exchange Offer will end
at 5:00 p.m. EST on April 16, 2018. The Exchange Offer is expected
to close on or about April 24, 2018 and is subject to certain
closing conditions including approval by the TSX.
The sales period for the offering of Preferred
Shares will end at 9:00 a.m. EST on April 24, 2018. The offering of
Preferred Shares is expected to close on or about April 30, 2018.
The offering is subject to certain closing conditions including
approval by the TSX.
A prospectus supplement to the Company’s short
form base shelf prospectus dated November 2, 2017 containing
important detailed information about the Preferred Shares and the
Class A Shares being offered will be filed with securities
commissions or similar authorities in all provinces of Canada.
Copies of the prospectus supplement and the short form base shelf
prospectus may be obtained from your registered financial advisor
using the contact information for such advisor, or from
representatives of the agents listed above. There will not be any
sale or any acceptance of an offer to buy the securities being
offered until the prospectus supplement has been filed with the
Securities Commissions or similar authorities in each of the
provinces of Canada.
For further information, please contact
Financial 15 Split Corp. Investor Relations at416-304-4443 Toll
free at 1-877-4-Quadra (1-877-478-2372) or visit
www.financial15.com
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