TORONTO, Aug. 11, 2026 /CNW/ -- (TSX: DGS) (TSX: DGS.PR.A) Dividend Growth Split Corp. (the "Fund") is pleased to announce it is undertaking a treasury offering of class A and preferred shares (the "Class A Shares" and "Preferred Shares", respectively) (the "Offering").
The sales period for the Offering will end on Wednesday, August 12, 2026. The Offering is expected to close on or about August 19, 2026 and is subject to certain closing conditions including approval by the Toronto Stock Exchange ("TSX").
The Class A Shares will be offered at a price of $8.75 per Class A Share for a distribution rate of 13.7% on the issue price.(1)(2) The Preferred Shares will be offered at a price of $10.75 per Preferred Share to yield 6.3%.(2) The closing price on the TSX for each of the Class A Shares and Preferred Shares on August 10, 2026 were $8.77 and $10.88, respectively. The Class A Share and Preferred Share Offering prices were determined so as to be non-dilutive to the most recently calculated net asset value ("NAV") per unit of the Fund (calculated as at August 6, 2026), as adjusted for dividends and certain expenses to be accrued prior to or upon settlement of the Offering. The Offering is being led by RBC Capital Markets.
The investment objectives for the Class A Shares are to provide holders with regular monthly non-cumulative cash distributions targeted to be at least $0.10 per Class A Share and to provide holders of Class A Shares with the opportunity for growth in the net asset value per Class A Share. Over the past 10 years, the Class A Share has generated a 19.2% per annum return, significantly outperforming the S&P/TSX Composite Total Return Index by 6.7% per annum.(2)
The investment objectives for the Preferred Shares are to provide holders with fixed cumulative preferential quarterly cash distributions, currently in the amount of $0.16875 per Preferred Share (6.75% per annum on the original $10.00 issue price), and to return the original issue price to holders of Preferred Shares on August 30, 2029. Over the last 10 years, the Preferred Share has generated a 5.8% per annum return.(2) Purchasers of Preferred Shares in this Offering will be eligible to receive the full August 2026 quarterly dividend of $0.16875 per Preferred Share when the dividend is declared.
The Fund invests in a portfolio (the "Portfolio") consisting primarily of equity securities of Canadian dividend growth companies. In addition, the Company may hold up to 20% of the total assets of the Portfolio in global dividend growth companies for diversification and improved return potential, at the discretion of Brompton Funds Limited ("Brompton"). In order to qualify for inclusion in the Portfolio, at the time of investment, each dividend growth company included in the Portfolio must have (i) a market capitalization of at least CDN$2.0 billion; and (ii) a history of dividend growth or, in Brompton's view, have high potential for future dividend growth.
About Brompton Funds
For over 25 years, Brompton has been providing unique, well-conceived investments for Canadians, with a focus on low management fees, performance driven diversification strategies and attractive income and growth solutions for various market cycles. 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 info@bromptongroup.com or visit our website at www.bromptongroup.com.
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 Fund 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.
(1) No distributions will be paid on the Class A Shares if (i) the distributions payable on the Preferred Shares are in arrears, or (ii) in respect of cash distributions, after the payment of cash distributions by the Fund the net asset value ("NAV") per Unit would be less than $15.00. |
(2) Annualized yield on offer price. See Performance table below. |
Dividend Growth Split Corp. Compound Annual NAV Returns to July 31, 2026 | 1 Year | 3 Years | 5 Years | 10 Years |
Class A Shares (TSX: DGS) | 42.8 % | 39.1 % | 25.6 % | 19.2 % |
S&P/TSX Composite Total Return Index | 32.3 % | 22.9 % | 15.0 % | 12.5 % |
Preferred Shares (TSX: DGS.PR.A) | 6.9 % | 6.4 % | 6.1 % | 5.8 % |
Returns are for the periods ended July 31, 2026 and are unaudited. The table shows the Fund's compound return on its Class A Shares and Preferred Shares for each period indicated, compared with the S&P/TSX Composite Total Return Index (the "Index"). The Index tracks the performance, on a market weight basis and a total return basis, of a broad index of large-capitalization issuers listed on the TSX. The Fund is actively managed; therefore, its performance is not expected to mirror that of the Index, which has a more diversified portfolio and includes a substantially larger number of companies. Furthermore, the Index's performance is calculated without the deduction of management fees, fund expenses and trading commissions, whereas the performance of the Fund is calculated after deducting such fees and expenses. Additionally, the performance of the Class A Shares is impacted by the leverage provided by the Preferred Shares. The performance information shown is based on NAV per Class A Share and the redemption price per Preferred Share and assumes that cash distributions made by the Fund during the periods shown were reinvested at NAV per Class A Share and the redemption price per Preferred Share in additional Class A Shares and Preferred Shares of the Fund. Past performance does not necessarily indicate how the Fund will perform in the future. |
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You will usually pay brokerage fees to your dealer if you purchase or sell shares of the Fund 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 Fund and may receive less than the current net asset value when selling them. |
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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 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 does not take into account sales, redemption, distribution or optional charges or income tax 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. |
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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. |
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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 Dividend Growth Split Corp.
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