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North American Financial 15 Split Corp T.FFN

Alternate Symbol(s):  FNCSF

North American Financial 15 Split Corp. is a Canada-based mutual fund corporation, which invests in a portfolio of over 15 financial services companies. It offers two types of shares, such as Preferred Shares and Class A Shares. Its investment objectives with respect to preferred shares are to provide holders of preferred shares with cumulative preferential monthly cash dividends in the amount of over 5.5% annually and to pay the holders of the preferred shares a certain price per preferred share on or about the termination date. Its investment objectives with respect to class A shares are to provide holders of class A shares with regular monthly cash distributions and to permit holders to participate in all growth in the net asset value of the Company for a specific price per unit, by paying holders on or about the termination date such amounts as remain in the Company after paying a specific price per preferred share. Its investment manager is Quadravest Capital Management Inc.


TSX:FFN - Post by User

Post by primo105on Mar 31, 2023 1:02pm
366 Views
Post# 35372163

Some quick math

Some quick mathPossibly this explains the discount on the prefs..no idea why the commons are where they are:

Current annual dividend is $0.77496 per share.  Based on Nov 30, 2022 shares o/s 52,281,187 results in total cash outlay of $40,515,828.  In F2022 the fund only received $22,637,150 in dividends from its investments.

To receive $40M in dividends the yield on its investments must be 5.55% (based on the FMV $720M at Nov 30, 2022).  Some of the CAD banks pay this yield, but the US banks are not close.

Therefore, this could explain the discount on the prefs as the dividend payments are eating away at the NAV. However, this reasoning should result in the commons trading at a discount as well - so with those, I am perplexed.
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