Successful Overnight Offering

Canadian Life Companies Split Corp. announced a successful overnight offering, raising approximately $40 million through the sale of Preferred Shares (TSX: LFE.PR.B) and Class A Shares (TSX: LFE). The offering, which was managed by National Bank Financial Inc., concluded on June 19, 2025, with the closing date anticipated around June 26, pending TSX approval.

Preferred Shares were priced at $10.55, promising a yield of 6.64%, while Class A Shares were offered at $6.35, yielding 18.90%. On the eve of the offering, respective closing prices on the TSX for the Preferred Shares and Class A Shares stood at $10.70 and $6.50.

The net proceeds from the offering will be allocated to an actively managed portfolio comprising shares from major Canadian life insurance firms, including Great-West Lifeco Inc., Industrial Alliance Insurance & Financial Services Inc., Manulife Financial Corporation, and Sun Life Financial Inc.

The investment objectives for the Preferred Shares aim to provide fixed monthly cash dividends at a minimum of 7.00%, or the Prime Rate plus 2% (capped at 9%), based on a $10.00 original issue price. Furthermore, holders can expect the return of their original investment by December 1, 2030, subject to potential extensions. For Class A Shares, dividends will be issued at the discretion of the directors, with payouts occurring after Preferred Shares obligations are fulfilled, also scheduled for return by December 1, 2030.

A prospectus supplement with detailed information about both classes of shares will be made available through the appropriate Canadian securities commissions. The Company encourages interested investors to consult their financial advisors for copies of the prospectus.

The recent successful overnight offering by Canadian Life Companies Split Corp. is notable, particularly with the $40 million gross proceeds expected from the issuance of Preferred Shares (TSX: LFE.PR.B) and Class A Shares (TSX: LFE). Investors should approach this opportunity with a discerning eye on both the financial metrics and market conditions surrounding the insurance sector.

The Preferred Shares are priced at $10.55, offering a yield of 6.64%, backed by a robust dividend framework that is tied to either a fixed rate or prime rate plus a margin. This yield, coupled with a strong dividend policy, provides a compelling case for income-focused investors, particularly in an environment where interest rates may fluctuate. The defined capital return by December 2030 lends an extra layer of security.

Conversely, the Class A Shares are priced attractively at $6.35, with a significantly higher yield of 18.90%. This indicates potential for strong performance, albeit with inherent risk, especially as dividends are more discretionary compared to the Preferred Shares. The higher yield can be tempting, but investors should assess the volatility of the underlying assets, including major insurance companies like Manulife and Sun Life.

Given the Company's strategic focus on a portfolio of established Canadian life insurance companies, potential investors should consider the stability and growth prospects in this sector. With current trading prices of $10.70 for Preferred Shares and $6.50 for Class A Shares, investors will do well to monitor market conditions closely leading up to the offering's closure around June 26, 2025. Aligning investment choices with individual risk tolerance and return horizons will be crucial. As always, consultation with a financial advisor is recommended before making investment decisions.