Dividend Growth Split Corp. Renews At-The-Market Equity Program
Dividend Growth Split Corp. (the “Fund”) is pleased to announce that it has renewed its at-the-market equity program (“ATM Program”). This program allows the Fund to issue class A and preferred shares (the “Class A Shares” and “Preferred Shares”, respectively) to the public from time to time, based on the Fund’s discretion. The renewed ATM Program is a replacement for the prior one established in April 2023, which has now terminated.
Details of the ATM Program
Class A Shares and Preferred Shares sold under the ATM Program will be sold through the Toronto Stock Exchange (the “TSX”) or other Canadian marketplaces. The sales will occur at the prevailing market price at the time of sale, ensuring that pricing reflects the current market conditions. The agreement governing these sales is an equity distribution agreement dated recently with RBC Capital Markets acting as the Agent.
Structure of Share Sales
Sales will be classified as “at-the-market distributions” as per National Instrument 44-102 Shelf Distributions. Since the shares will be distributed at market prices, there may be variations in prices for different purchasers throughout the distribution period.
Financial Provisions
The ATM Program seeks to raise maximum gross proceeds of $75 million for both Class A Shares and Preferred Shares. The program is laid out under the terms of a prospectus supplement which complements the Fund’s short form base shelf prospectus.
Management and Investment Strategy
The Fund invests in a portfolio (the “Portfolio”) primarily composed of equity securities of Canadian dividend growth companies, doing so on an approximately equally-weighted basis. The Manager, Brompton Funds Limited, also has the discretion to invest up to 20% of the Portfolio’s total assets in global dividend growth companies to enhance diversification and potential returns.
Criteria for Investment
To qualify for inclusion in the Portfolio, a dividend growth company must meet certain criteria regarding market capitalization and demonstrated dividend growth. Specifically, the company should have a market capitalization of at least $2.0 billion and either a history of dividend growth or significant potential for future growth, as assessed by the Manager.
Investment Objectives
The investment objective for Class A Shares is to provide holders with regular monthly cash distributions targeted at a minimum of $0.10 per Class A Share, alongside a growth opportunity in the net asset value per Class A Share. For the Preferred Shares, the objective is to provide fixed cumulative preferential quarterly distributions, initially set at $0.1375 per Preferred Share and increasing to $0.16875 per Preferred Share from the end of September 2024 until the end of August 2029. Furthermore, the original issue price will be returned to Preferred Shareholders by the end of August 2029.
Performance Overview
Over the past decade, Class A Shares have recorded an impressive 11.4% annual total return based on NAV, surpassing the S&P/TSX Composite Index by 4.0% per annum. Similarly, the Preferred Shares have achieved a return of 5.5% per annum over the same period, performing better than the S&P/TSX Preferred Share Index by 3.0% per annum.
About Brompton Funds
Brompton Funds, established in 2000, operates as an experienced investment fund manager, focusing on income-generating investment solutions such as exchange-traded funds (ETFs) and other investment funds traded on TSX. Investors seeking further information are encouraged to contact their investment advisor, reach out to Brompton’s investor relations team at 416-642-6000 (or toll-free at 1-866-642-6001), or email at info@bromptongroup.com.
Frequently Asked Questions
1. What is the purpose of the ATM Program?
The ATM Program enables Dividend Growth Split Corp. to issue class A and preferred shares to the public as a means of raising capital for investment purposes.
2. Who manages the investment strategy of the Fund?
The investment strategy is managed by Brompton Funds Limited, which decides on allocation and investment practices.
3. What are the return expectations for Class A Shares?
Class A Shares aim to provide monthly distributions of at least $0.10 per share and opportunities for growth in value over time.
4. How does the performance of the Fund compare to indices?
Over the last 10 years, the Class A Shares have outperformed the S&P/TSX Composite Index, indicating effective management and sound investment choices.
5. How can investors access information about the Fund?
Investors can access information through financial advisors or directly from Brompton, including public filings available on SEDAR+.
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