R Split III Corp. has announced:
it has completed its initial public offering of its Class B Preferred Shares, Series 1 (the “Preferred Shares”), raising approximately $16.8 million through the issuance of 1,234,962 Preferred Shares at a price of $13.60 per Preferred Share. In addition, the Company has redeemed all of its outstanding Class A Preferred Shares.
The Preferred Shares were offered to maintain the leveraged “split share” structure of the Company following the successful reorganization of the Company (approved at a special meeting of holders of Class A Capital Shares on March 14, 2012), which, among other things, extended the redemption date of the Capital Shares for an additional five year term. The Preferred Shares were offered to the public by a syndicate of agents led by Scotia Capital Inc.
Upon the close of business on May 31, 2012 there will be 2,469,924 Capital Shares and 1,234,962 Preferred Shares issued and outstanding.
R Split III Corp. is a mutual fund corporation created to hold a portfolio of common shares of the Royal Bank of Canada. Capital Shares and Preferred Shares of R Split III Corp. are listed for trading on The Toronto Stock Exchange under the symbols RBS and RBS.PR.B respectively.
The prospectus provides the following information:
- Coupon = 4.25%
- Redemption Date 2017-5-31
- Monthly Retraction with formula: 95%NAV – (2C + 1)
- MER = 0.48% of Whole Unit Value
Income Coverage as of the 12H1 Financials was 1.4+:1. These financials note a wonderfully conservative dividend policy:
The Company pays fixed distributions on the Preferred Shares and should the net asset value per Unit at the date of each dividend declaration exceed the original issue price of the Preferred Shares after giving effect to the Capital Share dividend, the Company’s policy is to make cash distributions on the Capital Shares equal to the excess, if any, of dividends received by the Company on the Royal Bank Shares less the fixed preferential distribution paid on the Preferred Shares and all administrative and operating expenses. Where the net asset value per Unit at time of declaration, after giving effect to the Capital Share dividend, is less than or equal to the original price of the Preferred Shares, any excess cash will be reinvested in short-term debt securities or Royal Bank Shares.
Sadly, there are not enough of these preferreds extant to warrant tracking by HIMIPref™.