Terms

Series

7.875% Series C Cumulative Preferred Shares

Liquidation Preference

$25.00

Coupon Rate

7.875%

Rate Type

Fixed

Annual Dividend

$1.97

Payment Frequency

Quarterly

Cumulative

Yes

Perpetual

Yes

Convertible

No

Callable

Yes

First Call Date

January 30, 2025

First Call Price

$25.00

Redemption Notice Period

30 days

Capital Stack Ranking

Junior To: All Existing And Future Indebtedness Of The Trust, Any Future Senior Equity Securities Or Preferred Shares Ranking Senior To Series C; Pari Passu With: Series A Preferred Shares, Series B Preferred Shares, Other Parity Preferred Shares; Senior To: Common Shares, Junior Shares

Regulatory (Basel III) Call

No

Tax Classification

Mlp K1

Qualifies for QDI

No

Qualifies for DRD

No

Shares Offered

4,000,000

Prospectus Summary

Compass Diversified Holdings, a Delaware statutory trust that acquires and manages small and middle-market businesses, is offering 4,000,000 shares of its 7.875% Series C Cumulative Preferred Shares at $25.00 liquidation preference per share, with an optional first call date of January 30, 2025 at par. These are whole preferred shares (not depositary receipts) paying fixed quarterly distributions on January 30, April 30, July 30, and October 30, beginning January 30, 2020. Critically, the shares are cumulative — if the board suspends distributions, unpaid amounts accumulate and must be paid in full before any distribution can be made on common or junior shares, providing holders meaningful contractual protection against distribution deferrals. The Series C Preferred Shares rank senior to common shares and all other junior share classes, and pari passu with the existing Series A (7.250%) and Series B (7.875% fixed-to-floating) Preferred Shares. However, they rank junior to all of the trust's existing and future indebtedness — including the company's revolving credit facility and 8.00% Senior Notes due 2026 — as well as any future senior preferred securities. Because the trust's sole asset is its interest in Compass Group Diversified Holdings LLC, which in turn holds controlling interests in operating subsidiaries, holders face structural subordination: cash distributions depend entirely on the subsidiaries' ability to generate earnings and upstream payments. There is no regulatory (Tier 1) capital call provision; instead, the trust provides a Tax Redemption Event call (at $25.25 plus accrued distributions) if a tax-related event occurs prior to January 30, 2025. At the $25.00 offering price, the Series C Preferred Shares yield 7.875% per annum ($1.96875 annually; ~$0.4922 per regular quarterly period). Importantly, distributions do not qualify for the preferential 15%/20% qualified dividend income (QDI) rate or the corporate dividends-received deduction (DRD) — the trust is taxed as a partnership and will issue Schedule K-1s to holders; income is expected to be characterized as largely interest income, taxed at ordinary rates. The dividend stopper blocks distributions on common and junior shares if any past Series C cumulative distributions remain unpaid, though no restriction applies during the initial stub period ending January 30, 2020. Record dates are set by the company's board in accordance with the share designation; no fixed business-day-before-payment-date rule is specified.

Summarized from the SEC prospectus filing.

Distribution History

Ranking vs. Other Preferreds

Dividend Stopper Provisions

Dividend Stopper Description

If Series C Preferred Share cumulative distributions are not fully paid for all past periods, the issuer cannot pay dividends on or repurchase common shares or any junior shares; this restriction does not apply during the initial distribution period ending January 30, 2020.

Other Preferreds from Compass Diversified Holdings

Div Score Breakdown

Reinvesty's multi-factor safety analysis for this preferred, composite score: 40 (Weak)