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Brompton Split Banc Corp. Announces Intention to Implement a Class A Share Split and Concurrent Preferred Share Private Placement

Not for distribution to U.S. newswire services or for dissemination in the United States.

TORONTO, Nov. 22, 2021 (GLOBE NEWSWIRE) — (TSX:SBC, SBC.PR.A)) Brompton Split Banc Corp. (the “Company”) is pleased to announce its intention to effect a stock split of its Class A shares (the “Share Split”) as well as a concurrent private placement of preferred shares (the “Private Placement”) due to the Company’s strong performance. The Company expects that the Share Split should result in an overall increase in the dollar amount of distributions to be paid to holders of Class A shares by approximately 25% because the Company will maintain its policy to pay monthly dividends on the Class A shares of $0.10 per share. The Company intends to announce the final number of Class A shares and Preferred shares expected to be outstanding following the Share Split and Private Placement by way of press release on or about December 1, 2021.

It is the Company’s intention that Class A shareholders of record on or about Tuesday, December 14, 2021 will receive additional Class A shares pursuant to the Share Split. The number of preferred shares offered in the Private Placement will be an amount such that following the Share Split there will be an equal number of Class A and preferred shares outstanding. The Company expects that the Share Split and the Private Placement will result in an approximately 25% increase in the number of outstanding Class A shares and preferred shares. The Share Split and the Private Placement are subject to regulatory approval as well as the approval of the Toronto Stock Exchange (the “TSX”).

Following the Share Split, Class A shareholders will continue to receive the currently targeted monthly distribution of $0.10 per Class A share, although Class A shares per investor should reflect a balance which is 25% higher than prior to the Share Split. As such, existing Class A shareholders are expected to be provided with an effective increase in monthly cash distributions equal to approximately 25%. The Company provides a distribution reinvestment plan, on a commission-free basis, for Class A shareholders that wish to reinvest distributions and realize the benefits of compound growth.   

Following the completion of the Share Split and the Private Placement, the preferred shares are expected to have downside protection from a decline in the value of the Company’s portfolio of approximately 56%.(1)

Over the last 10 years, the Class A shares have delivered a 17.8% per annum total return based on NAV, outperforming the S&P/TSX Capped Financials Index by 5.1% per annum and the S&P/TSX Composite Index by 9.0% per annum.(2) Since inception, Class A shareholders have received cash distributions of $18.75 per Class A share.

The preferred shares have delivered a 4.9% per annum total return over the last 10 years based on NAV, outperforming the S&P/TSX Preferred Share Index by 1.5% per annum with lower volatility.(2)   

The Company invests, on an approximately equal weighted basis, in a portfolio (the “Portfolio”) consisting of common shares of the six largest Canadian banks (currently, 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 purposes of enhanced diversification and return potential.

About Brompton Funds

Founded in 2000, Brompton Funds Limited (“Brompton”) is an experienced investment fund manager with income focused investment solutions including Toronto Stock Exchange listed closed-end funds and exchange-traded 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 us at info@bromptongroup.com or visit our website at www.bromptongroup.com

(1)   Based on the NAV of the Class A shares used to determine the Share Split ratio.
(2)   See Standard Performance Data table below.

Brompton Split Banc Corp.
Compound Annual NAV returns to October 31, 2021
1 Yr   3 Yr   5 Yr   10 Yr   S.I.  
Class A Shares (TSX:SBC) 123.3 % 21.6 % 17.9 % 17.8 % 12.7 %
S&P/TSX Capped Financials Index 55.7 % 15.3 % 12.6 % 12.7 % 9.2 %
S&P/TSX Composite Index 38.8 % 15.3 % 10.6 % 8.8 % 7.4 %
           
Preferred Shares (TSX:SBC) 5.1 % 5.1 % 5.0 % 4.9 % 5.1 %
S&P/TSX Preferred Share Index 28.8 % 6.7 % 7.2 % 3.4 % 3.1 %

Returns are for the periods ended October 31, 2021. Inception date November 15, 2005. The table shows the Company’s compound return on a Class A share and preferred share for each period indicated, compared with the S&P/TSX Capped Financials Index (“Financials Index”), the S&P/TSX Composite Index (“Composite Index”), and the S&P/TSX Preferred Share Index (“Preferred Share Index”) (together the “Indices”). The Financials Index is derived from the Composite Index based on the financials sector of the Global Industry Classification Standard. The Composite Index tracks the performance, on a market weight basis, of a broad index of large-capitalization issuers listed on the TSX. The Preferred Share Index tracks the performance, on a market weight basis, of preferred shares listed on the TSX that meet criteria relating to minimum size, liquidity, issuer rating, and exchange listing. The Class A shares and preferred shares are not expected to mirror the performance of the Indices which have more diversified portfolios. 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 Company’s Class A shares is impacted by the leverage provided by the Company’s preferred shares.

You will usually pay brokerage fees to your dealer if you purchase or sell shares of the investment funds on the TSX or other alternative Canadian trading system (an “exchange”). If shares are purchased or sold on an exchange, investors may pay more than the current net asset value when buying shares of the investment fund 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 fund in the 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.

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 fund, to the future outlook of the fund and anticipated events or results and may include statements regarding the future financial performance of the fund. 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.

 


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