Financial 15 Split Corp. Reorganization, Increased Preferred Dividends
November 19 2020 - 9:00AM
Financial 15 Split Corp. (the “Company”) is pleased to announce a
reorganization that will provide for increased asset coverage and
increased dividends for its Preferred shares and anticipated
monthly distributions on its Class A shares.
In connection with the extension of the
termination date of the Company until December 1, 2025, the
Company’s Class A shares will consolidate such that each Class A
shareholder will receive 0.40 Class A shares for each Class A share
held. As at November 18, 2020, the pro forma NAV per unit of
the Company after giving effect to this reorganization will be
$17.88 ($13.15 pre-consolidated). The payment of monthly
dividends to Class A shareholders at a rate of $1.20 per year are
expected post-consolidation (with NAV per unit above $15).
As at the consolidation date, the resultant increase in the net
asset value per Class A share will have the impact of increasing
the asset coverage ratio for the Preferred shares. Based on
the NAV per unit on November 18, 2020, the asset coverage ratio
would increase from 132% to 179%. In addition, as previously
announced on September 23, 2020, Preferred share dividends will
increase from 5.5% to 6.75% annually effective December 1,
2020.
The aggregate intrinsic value of the Class A
shareholders’ holdings will remain the same and as a result, the
net asset value per Class A share will increase on a proportionate
basis for each post-consolidation share on the consolidation
date. In the event that the share consolidation would
otherwise result in the issuance of fractional shares, 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 consolidation will be a non-taxable
event. No action is required to be taken by Class A shareholders in
connection with the consolidation.
The reorganization is required in order to
maintain an equal number of Class A shares and Preferred Shares
outstanding at all material times. More Preferred shares were
tendered for retraction than Class A shares pursuant to the special
retraction right offered to shareholders in connection with the
extension of the termination date of the Company. Retracting
shareholders will receive a retraction price based on the November
30, 2020 net asset value per unit.
It is expected that the Class A shares will
trade on a post-consolidation basis at the opening of trading on or
about December 17, 2020.
The impact of the Class A share consolidation
will be reflected in the reported net asset value per unit as at
December 31, 2020.
The Company invests in a high quality portfolio
consisting of 15 financial services companies made up of Canadian
and U.S. issuers as follows: Bank of Montreal, The Bank of Nova
Scotia, Canadian Imperial Bank of Commerce, Royal Bank of Canada,
Toronto-Dominion Bank, National Bank of Canada, Manulife Financial
Corporation, Sun Life Financial, Great-West Lifeco, CI Financial
Corp, Bank of America, Citigroup Inc., Goldman Sachs Group, JP
Morgan Chase & Co. and Wells Fargo & Co.
Certain statements included in this news release
constitute forward-looking statements, including, but not limited
to, those identified by the expressions “expect”, “intend”, “will”
and similar expressions to the extent they relate to the Company.
The forward-looking statements are not historical facts but reflect
the Company’s current expectations regarding future results or
events. These forward-looking statements are subject to a number of
risks and uncertainties that could cause actual results or events
to differ materially from current expectations. Although the
Company believes that the assumptions inherent in the
forward-looking statements are reasonable, forward-looking
statements are not guarantees of future performance and,
accordingly, readers are cautioned not to place undue reliance on
such statements due to the inherent uncertainty therein. The
Company undertakes no obligation to update publicly or otherwise
revise any forward-looking statement or information whether as a
result of new information, future events or other such factors
which affect this information, except as required by law.
Commissions, trailing commissions, management fees and expenses all
may be associated with mutual fund investments. Investors should
read the prospectus before investing. Mutual funds are not
guaranteed, their values change frequently and past performance may
not be repeated. Please read the Company’s publicly filed documents
which are available at www.sedar.com.
Investor Relations: 1-877-478-2372Local:
416-304-4443www.financial15.cominfo@quadravest.com
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