LBS.PR.A Life and Banc Split Corp

/NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES./

TORONTO, Oct. 16, 2023 /CNW/ - (TSX: LBS) (TSX: LBS.PR.A) Life & Banc Split Banc Corp. (the "Company") is pleased to announce it is undertaking a treasury offering of preferred shares ("Preferred Shares") (the "Offering").

The sales period for this offering is expected to end on Wednesday, October 18, 2023.  The offering is expected to close on or about October 31, 2023 and is subject to certain closing conditions including approval by the Toronto Stock Exchange ("TSX").

The Preferred Shares will be offered at a price of $9.60 per Preferred Share for a yield to maturity of 8.3%.⁽¹⁾ The closing price on the TSX for the Preferred Shares on October 13, 2023 was $9.72. The offering is being led by RBC Capital Markets.

The investment objectives for the Preferred Shares are to provide holders with fixed cumulative preferential quarterly cash distributions and to return the original issue price plus accrued dividends (if any) to holders of Preferred Shares on the maturity date. On April 4, 2023, the Company announced that the Board of Directors approved an extension of the maturity date of the Company for an additional 5-year term to October 30, 2028. On August 28, 2023, the Company announced that the distribution rate for the Preferred Shares for the new 5-year term from October 31, 2023 to October 30, 2028 will be $0.725 per annum (7.25% on the par value of $10.00 per Preferred Share).

Based on the most recently calculated net asset value per unit of the Company on October 12, 2023, the Preferred Shares have downside protection from a decline in the value of the Company's portfolio of approximately 38%. The Preferred Shares have delivered a 5.5% per annum total return over the last 5 years, outperforming the S&P/TSX Preferred Share Index by 6.4% per annum.⁽¹⁾ The Preferred Shares have a DBRS rating of Pfd-3.

The Company received retraction notices from certain holders of Preferred Shares in connection with the non-concurrent retraction right on October 30, 2023. The Company is offering Preferred Shares under the Offering in order to, to the extent possible, have a matched number of Preferred Shares and Class A Shares of the Company ("Class A Shares") outstanding following the non-concurrent retraction and re-leverage the Company's portfolio for the benefit of the Class A shareholders.  Class A shareholders enjoy the opportunity for enhanced capital appreciation because of the leverage provided by the Preferred Shares. Class A Shares have generated a 12.1% per annum return over the past 10 years, outperforming the S&P/TSX Capped Financials Index by 3.0% per annum.⁽¹⁾

The Company invests in a portfolio consisting of common shares of the six largest Canadian banks and the four major publicly traded Canadian life insurance companies:

About Brompton Funds

Founded in 2000, Brompton is an experienced investment fund manager with income focused investment solutions including exchange-traded funds (ETFs) and other TSX traded investment funds. 

⁽¹⁾  See Performance table below. Yield to maturity for the Preferred Share is based on maturity date of October 30, 2028.

A short form base shelf prospectus containing important detailed information about the securities being offered has been filed with securities commissions or similar authorities in each of the provinces and territories of Canada. Copies of the short form base shelf prospectus may be obtained from a member of the syndicate. The Company intends to file a supplement to the short form base shelf prospectus, and investors should read the short form base shelf prospectus and the prospectus supplement before making an investment decision. There will not be any sale or any acceptance of an offer to buy the securities being offered until the prospectus supplement has been filed with the securities commissions or similar authorities in each of the provinces and territories of Canada.

You will usually pay brokerage fees to your dealer if you purchase or sell shares of the Company on the TSX or other alternative Canadian trading system (an "exchange").  If the shares are purchased or sold on an exchange, investors may pay more than the current net asset value when buying shares of the Company 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 Company in its public filings available at www.sedarplus.ca.  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.

Returns are for the periods ended September 30, 2023, and are unaudited. Inception date October 17, 2006. The table shows the compound return on a Preferred Share and Class A Share for each period indicated compared to the S&P/TSX Preferred Share Index ("Preferred Share Index") and the S&P/TSX Capped Financials Index ("Financials Index")(together the "Indices"). The Preferred Share Index tracks the performance, on a market‑weight basis, of a broad index of preferred shares trading on the TSX that meet the criteria relating to size, liquidity and issuer rating. The Financials Index is derived from the S&P/TSX Composite Index based on the financials sector of the Global Industry Classification Standard. The Company invests in a passively managed portfolio of four Canadian life insurance companies and six Canadian banks.  It is not expected that the Company's performance will mirror that 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 Class A Shares is impacted by the leverage provided by the Preferred Shares.

Past performance does not necessarily indicate how the Preferred Shares and Class A Shares will perform in the future. The information shown is based on the redemption price per Preferred Share or net asset value per Class A Share and assumes that distributions made by the Company on the Preferred Shares and Class A Shares in the periods shown were reinvested (at the net asset value per Class A Share or redemption price per Preferred Share) in additional Preferred Shares or Class A Shares of the Company.

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

SOURCE Brompton Life & Banc Split Corp