2021-11-22 17:45 ET - News Release
An anonymous director reports
BROMPTON SPLIT BANC CORP. ANNOUNCES INTENTION TO IMPLEMENT A CLASS A SHARE SPLIT AND CONCURRENT PREFERRED SHARE PRIVATE PLACEMENT
Brompton Split Banc Corp. intends to effect a stock split of its Class A shares as well as a concurrent private placement of preferred shares 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 per cent because the company will maintain its policy to pay monthly dividends on the Class A shares of 10 cents 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 Dec. 1, 2021.
It is the company's intention that Class A shareholders of record on or about Tuesday, Dec. 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-per-cent 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.
Following the share split, Class A shareholders will continue to receive the currently targeted monthly distribution of 10 cents per Class A share, although Class A shares per investor should reflect a balance which is 25-per-cent 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 per cent. 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 per cent (1).
Over the last 10 years, the Class A shares have delivered a 17.8 per cent per annum total return based on NAV (net asset value), outperforming the S&P/TSX Capped Financials Index by 5.1 per cent per annum and the S&P/TSX Composite Index by 9.0 per cent 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 cent per annum total return over the last 10 years based on NAV, outperforming the S&P/TSX Preferred Share Index by 1.5 per cent per annum with lower volatility (2).
The company invests, on an approximately equal weighted basis, in a 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 per cent of the total assets of the portfolio in investments in global financial companies for the purposes of enhanced diversification and return potential.