North American Financial 15 Split Corp T.FFN

NAV March 27 and a synopsis of the ATM program

[AnEducator]

My calculations indicate the closing NAV as being around $13.51, but that does not take into account any adjustments to the portfolio. The true value is likely a little higher.

As for the ATM program, both preferred and capital shares are subject to it as the fund must attempt to have an equal number of both at all "material" times, as per the prospectus. All the ATM does is sell new shares into the open market to raise cash, thereby increasing the size of the fund.

[Markyp]

So nav has gone up?

[primo105]

Thanks for this.  Can you confirm on origination date of this split share corp, the NAV was $20 ($10 for prefs and $10 for commons)?

[EdPaquette]

Commons started out at $15.  An educator would probably tell you to read the prospectus.   :)

[primo105]

ok I see that now.  Total NAV started out just under $25 (after agent fees)...if they are performing an ATM on the preferredsat a $0.50 discount doesn't that make it all that much harder for the commons to maintain any value? Does anyone have any experience redeeming the preferred shares on the termination date in the past?  Based on the chart it appears the preferreds will close the

[AnEducator]

The only way Quadravest can sell preferreds at a discount is if they sell the capital shares at a sufficiently high premium to compensate for both the discount as well as agent fees and whatever other costs that are involved with the process. In other words, the ATM should not result in dilution to the NAV. In most cases, the NAV actually increases because the premium on these bloated capital

[primo105]

That is a really good point!  My plan was to load up on the commons on a pullback but the prefs appear to be a much better deal.  Sure, the upside is quantifiable but I see limited downside.