US Financial 15 Split Corp.

US Financial 15 Split Corp.

February 25, 2009 17:41 ET

US Financial 15 Split Corp.: Financial Results to November 30, 2008

TORONTO, ONTARIO--(Marketwire - Feb. 25, 2009) - US Financial 15 Split Corp. ("US Financial 15") announces its annual financial results for the year November 30, 2008.

By the end of 2008, the cumulative impact of the deterioration in financial and economic conditions created record lows in business, investor and consumer confidence and resulted in recessionary conditions throughout the world. In addition, the de-leveraging of hedge funds and other similar funds during the final months exacerbated market volatility and losses in financial markets. Market indices experienced declines not seen since the Great Depression of the 1930s. The S&P 500 Financials index declined by -47.62% for the year ending November 30, 2008.

Throughout this difficult environment, the core holdings in the portfolio have been significantly impacted as US financial services companies have been among the worst performing stocks. The net asset value per unit (a unit consisting of one Preferred share and one Class A share) declined to $6.94 (59.8% decline per unit including dividends) which was reflective of the overall decline in the US financials. The core holdings of Lehman Brothers, American International Group, Washington Mutual, Wachovia and Merrill Lynch were particularly hit hard in the fall of 2008 as the crisis escalated. Lehman Bros. was replaced by PNC Bank as a core holding on September 22, 2008. The Company as at November 30, 2008 was reviewing potential core holding replacements for American International Group and Washington Mutual Inc. In order to provide further diversification during this difficult period, the Company has additional investments in BB&T Corporation, CME Group Inc., Metlife Inc., Regions Financial Corp. and Sovereign Bancorp. One or more of these holdings may be named as a core holding replacement.

The decline in the net asset value per unit below $15 during the year required the Company to limit the payment of monthly dividends to the Class A shareholders as per the prospectus. Class A shareholders received 4 monthly payments and Preferred shares received all 12 regular monthly payments. The Company maintained its required foreign exchange hedging throughout the period in which a minimum 50% of US exposure is hedged through Canadian/U.S dollar foreign exchange contracts. The dividend income in the portfolio continues to be supplemented by a limited covered call writing program which provides some additional income to the portfolio.

US Financial 15 invests in a portfolio consisting of U.S. financial services companies as follows: American Express, American International Group, Bank of America, Citigroup, Fifth Third Bancorp, The Goldman Sachs Group, J.P. Morgan Chase, Morgan Stanley, SunTrust Banks, U.S. Bancorp, Corporation, Washington Mutual and Wells Fargo. Shares held within the Portfolio are expected to range between 4-8% in weight but may vary from time to time.

Selected Financial Information from the Statement of Financial Operations:
For the year ending November 30, 2008
($ Millions)
Income 2.154
Expenses (0.750)
Net investment income 1.404
Realized option premiums and gain (loss) on sale of investments (24.426)
Change in unrealized depreciation of investments (27.635)
Decrease in net assets from operations before distributions (50.657)

Comparative financial information is available in documents filed on

Contact Information

  • US Financial 15 Split Corp.
    Investor Relations
    (416) 304-4443 or 1-877-4-Quadra (1-877-478-2372)