TORONTO, Jan. 30, 2020 (GLOBE NEWSWIRE) -- (TSX: OSP, OSP.PR.A) As previously announced, the board of directors of Brompton Oil Split Corp. (the “Fund”) determined that it would extend the maturity date of the class A and preferred shares of the Company for a period of up to five years beyond the current maturity date of March 31, 2020. Today, the board of directors announces that the new term of the Fund will be 3 years to March 30, 2023. In addition, the distribution rate for the preferred shares (the “Preferred Shares”) for the new 3 year term from April 1, 2020 to March 30, 2023 has been increased to $0.65 per Preferred Share per annum (6.5% on the original issue price of $10) payable quarterly. The new Preferred Share distribution rate was determined considering current market rates for preferred shares with similar terms, as well as the current Preferred Share coverage level of the Fund. Based on the net asset value of the portfolio holdings as of January 29, 2020, in order to meet the new Preferred Share distribution rate and maintain the net asset value per unit, the Fund’s portfolio requires capital appreciation of approximately 4.0% per annum. In addition, the Fund confirmed that it will maintain the targeted monthly Class A Share distribution rate of at least $0.10 per Class A Share which will become payable when the net asset value per unit (consisting of one Class A Share and one Preferred Share) is greater than $15.00, after taking into consideration the payment of the Class A Share distribution.
The Fund invests in a portfolio of equity securities of large capitalization North American oil and gas issuers, primarily focused on those with significant exposure to oil.
In connection with the extension, shareholders who do not wish to continue their investment in the Fund, may retract their Preferred Shares and Class A Shares on March 31, 2020 pursuant to a special retraction right and receive a retraction price that is calculated in the same way that such price would be calculated if the Fund were to terminate on March 31, 2020. Pursuant to this option, the retraction price may be less than the market price if the security is trading at a premium to net asset value. To exercise this retraction right shareholders must provide notice to their investment dealer by their dealer’s deadline which in any event cannot be later than February 28, 2020 at 5:00 p.m. (Toronto time). Alternatively, shareholders may sell their shares through their securities dealer for the market price at any time, potentially at a higher price than would be achieved through retraction, or shareholders may take no action and continue to hold their shares.
In the event that more Class A Shares than Preferred Shares have been redeemed pursuant to the non-concurrent retraction right, the Company may redeem Preferred Shares on a pro rata basis in a number to be determined by the Company reflecting the extent to which the number of Preferred Shares outstanding following the non-concurrent retraction exceeds the number of Class A Shares outstanding following the non-concurrent retraction. Conversely, in the event that more Preferred Shares than Class A Shares have been redeemed pursuant to the non-concurrent retraction right, the Company may redeem Class A Shares on a pro rata basis in a number to be determined by the Company reflecting the extent to which the number of Class A Shares outstanding following the non-concurrent retraction exceeds the number of Preferred Shares outstanding following the non-concurrent retraction.
About Brompton Funds
Founded in 2000, Brompton is an experienced investment fund manager with approximately $2 billion in assets under management. Brompton’s investment solutions include TSX closed-end funds and exchange-traded funds. For further information, please contact your investment advisor, call Brompton’s investor relations line at 416-642-6000 (toll-free at 1-866-642-6001), email firstname.lastname@example.org or visit our website at www.bromptongroup.com.
You will usually pay brokerage fees to your dealer if you purchase or sell shares of the investment funds on the Toronto Stock Exchange 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 investment fund 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 Fund in the public filings available at www.sedar.com. Investment funds are not guaranteed, their values change frequently, and past performance may not be repeated.
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 Fund, to the future outlook of the Fund and anticipated events or results and may include statements regarding the future financial performance of the Fund. 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.