TORONTO, Nov. 16,
2022 /CNW/ - (TSX: SBC) (TSX: SBC.PR.A) Brompton
Split Banc Corp. (the "Company") is pleased to announce it is
undertaking a treasury offering of preferred shares ("Preferred
Shares") (the "Offering").
The sales period for this offering will end no later than
9:00 a.m. (ET) on Friday, November
18, 2022. The offering is expected to close on or about
November 24, 2022 and is subject to
certain closing conditions including approval by the Toronto Stock
Exchange ("TSX").
The Preferred Shares will be offered at a price of $9.55 per Preferred Share for a yield to maturity
of 7.5%.(1) The closing price on the TSX for the
Preferred Shares on November 15, 2022
was $9.64. The offering is being led
by RBC Capital Markets.
The investment objectives for the Preferred Shares are to
provide holders with fixed cumulative preferential quarterly cash
distributions and to return the original $10.00 issue price to holders of Preferred Shares
on the maturity date. On March 24,
2022, the Company announced that the Board of Directors
approved an extension of the maturity date of the Company for an
additional 5-year term to November 29,
2027. On September 26, 2022,
the Company announced that the distribution rate for the Preferred
Shares for the new 5-year term from November
30, 2022 to November 29, 2027
will be $0.625 per annum.
Based on the most recently calculated net asset value per unit
of the Company on November 10, 2022,
the Preferred Shares have downside protection from a decline in the
value of the Company's portfolio of approximately 51%. The
Preferred Shares have delivered a 5.1% per annum total return over
the last 5 years, outperforming the S&P/TSX Preferred Share
Index by 4.7% per annum.(1) The Preferred Shares have a
DBRS rating of Pfd-3(high).
The Company received retraction notices from certain holders of
Preferred Shares in connection with the non-concurrent retraction
right on November 29, 2022. The
Company is offering Preferred Shares under the Offering in order
to, to the extent possible, have a matched number of Preferred
Shares and Class A Shares of the Company ("Class A Shares")
outstanding following the non-concurrent retraction and secure term
financing for the Class A shareholders for the next 5-year term
ending on November 29, 2027.
Class A shareholders enjoy the opportunity for enhanced capital
appreciation because of the leverage provided by the Preferred
Shares. Class A Shares have generated a 14% per annum return over
the past 10 years, outperforming the S&P/TSX Capped Financials
Index by 3.1% per annum.(1)
The Company invests in a portfolio (the "Portfolio") consisting
of common shares of the six largest Canadian banks: Royal Bank of
Canada, The Bank of Nova Scotia, National Bank of Canada, The Toronto-Dominion Bank, Canadian
Imperial Bank of Commerce and Bank of Montreal. In addition, the Company may hold up
to 10% of the total assets of the Portfolio in investments in
global financial companies for the purpose of enhanced
diversification and return potential.
About Brompton Funds
Founded in 2000, Brompton is an experienced investment fund
manager with income focused investment solutions including
exchange-traded funds (ETFs) and other TSX traded investment funds.
For further information, please contact your investment advisor,
call Brompton's investor relations line at 416-642-6000 (toll-free
at 1-866-642-6001), email info@bromptongroup.com or visit our
website at www.bromptongroup.com.
(1) See Performance table below. Yield to
maturity for the Preferred Share is based on maturity date of
November 29, 2027.
A short form base shelf prospectus containing important
detailed information about the securities being offered has been
filed with securities commissions or similar authorities in each of
the provinces and territories of Canada. Copies of the short form base shelf
prospectus may be obtained from a member of the syndicate. The
Company intends to file a supplement to the short form base shelf
prospectus, and investors should read the short form base shelf
prospectus and the prospectus supplement before making an
investment decision. 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 and
territories of Canada.
You will usually pay brokerage fees to your dealer if you
purchase or sell shares of the Company on the TSX or other
alternative Canadian trading system (an "exchange"). If the
shares are purchased or sold on an exchange, investors may pay more
than the current net asset value when buying shares of the Company
and may receive less than the current net asset value when selling
them.
There are ongoing fees and expenses associated with owning
shares of an investment fund. An investment fund must prepare
disclosure documents that contain key information about the
fund. You can find more detailed information about the
Company in its public filings available at www.sedar.com. The
indicated rates of return are the historical annual compounded
total returns including changes in share value and reinvestment of
all distributions and do not take into account certain fees such as
redemption costs or income taxes payable by any securityholder that
would have reduced returns. Investment funds are not guaranteed,
their values change frequently and past performance may not be
repeated.
Brompton Split Banc
Corp.
Compound Annual Returns
to October 31, 2022
|
1-Yr
|
3-Yr
|
5-Yr
|
10-Yr
|
S.I.
|
Preferred Shares
(TSX: SBC.PR.A)
|
5.1 %
|
5.1 %
|
5.1 %
|
4.8 %
|
5.0 %
|
S&P/TSX
Preferred Share Index
|
(16.2 %)
|
3.3 %
|
0.4 %
|
1.0 %
|
1.9 %
|
Class A Shares (TSX:
SBC)
|
(16.5 %)
|
10.2 %
|
7.2 %
|
14.0 %
|
10.8 %
|
S&P/TSX Capped
Financials Index
|
(5.9 %)
|
8.1 %
|
6.9 %
|
10.9 %
|
8.2 %
|
Returns are for the periods ended October 31, 2022 and are unaudited. Inception
date November 15, 2005. The table
shows the past performance of the Company's Preferred Shares and
Class A Shares compared to the S&P/TSX Preferred Share Index
("Preferred Share Index") and the S&P/TSX Capped Financials
Index ("Financials Index")(together the "Indices"). The Preferred
Share Index tracks the performance, on a market–weight basis, of a
broad index of preferred shares trading on the TSX that meet the
criteria relating to size, liquidity and issuer rating. The
Financials Index is derived from the S&P/TSX Composite Index
(the "Composite Index") based on the financials sector of the
Global Industry Classification Standard. Since the Indices have
more diversified portfolios, it is not expected that the Company's
performance will mirror that of the Indices. The Indices are
calculated without the deduction of management fees, fund expenses
and trading commissions, whereas the performance of the Company is
calculated after deducting such fees and expenses. Further, the
performance of the Class A Shares is impacted by the leverage
provided by the Preferred Shares.
Past performance does not necessarily indicate how the
Preferred Shares and Class A Shares will perform in the future. The
information shown is based on the redemption price per Preferred
Share or net asset value per Class A Share and assumes that
distributions made by the Company on the Preferred Shares and Class
A Shares in the periods shown were reinvested (at the net asset
value per Class A Share or redemption price per Preferred Share) in
additional Preferred Shares or Class A Shares of the
Company.
Certain statements contained in this document constitute
forward-looking information within the meaning of Canadian
securities laws. Forward-looking information may relate to matters
disclosed in this document and to other matters identified in
public filings relating to the Company, to the future outlook of
the Company and anticipated events or results and may include
statements regarding the future financial performance of the
Company. In some cases, forward-looking information can be
identified by terms such as "may", "will", "should", "expect",
"plan", "anticipate", "believe", "intend", "estimate", "predict",
"potential", "continue" or other similar expressions concerning
matters that are not historical facts. Actual results may vary from
such forward-looking information. Investors should not place undue
reliance on forward-looking statements. These forward-looking
statements are made as of the date hereof and we assume no
obligation to update or revise them to reflect new events or
circumstances.
The securities offered have not been registered under the
U.S. Securities Act of 1933, as amended, and may not be offered or
sold in the United States absent
registration or any applicable exemption from the registration
requirements. This news release does not constitute an offer to
sell or the solicitation of an offer to buy securities nor will
there be any sale of such securities in any state in which such
offer, solicitation or sale would be unlawful.
SOURCE Brompton Split Banc Corp.