Distribution declaration mechanics
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Fix the confirmed vehicle-type scoping bug: distribution-declaration-mechanics.md claimed its Canada-LPA-sourced mechanics (general partner declares, 90/10 split, Initial Period, First Secured Mortgage Debentures) were 'identical across all direct-hold solutions' when only Canada and the US are limited partnerships -- Spain (SOCIMI) and Mexico (FIBRA) are governed by entirely different legal/tax regimes with no partnership agreement. Rescoped the article explicitly to the LP-form vehicles, with the US vehicle correctly marked planned/intended rather than established
@@ -7,7 +7,7 @@ index_group: distribution-policy-and-mechanics type: topic content_type: topic quality: complete short_description: "How distributions in direct-hold limited partnerships are determined, declared, and paid: the ICR gate, proportional allocation across units, and the suspension protocol." short_description: "How distributions in the Canada and United States limited-partnership-form direct-hold vehicles are determined, declared, and paid: the ICR gate, proportional allocation across units, and the suspension protocol." status: active bcsc_class: public-disclosure-safe language_protocol: PROSE-TOPIC @@ -16,13 +16,18 @@ editor: woodfine-editorial paired_with: distribution-declaration-mechanics.es.md --- Distributions in direct-hold limited partnerships are declared by the general partner when This article describes distribution mechanics as they apply to the Canada and United States Direct-Hold Solutions, which are structured as limited partnerships. The Spain SOCIMI and Mexico FIBRA are governed by their own jurisdictions' distribution regimes, not by a partnership agreement, and are not covered by the mechanics described here. In the established Canada vehicle, distributions are declared by the general partner when the asset's operating performance satisfies the interest coverage ratio (ICR) floor. No distribution is declared from an asset whose ICR is below 1.2×. When distributions are declared, they are allocated to all outstanding units of the relevant asset in equal proportion — no unit carries a preferential distribution right over another. The mechanics are identical across all direct-hold solutions: the ICR gate, the proportional calculation, and the suspension protocol apply consistently across every asset vehicle in the programme. proportion — no unit carries a preferential distribution right over another. The planned United States vehicle is intended to apply an equivalent ICR gate, proportional calculation, and suspension protocol once established. ## Key takeaways @@ -72,7 +77,12 @@ single level: all outstanding units of the same asset receive the same per-unit ## Minimum distribution and retention Where a distribution is declared, the partnership pays at least 90% of the fiscal year's Distributable Income to limited partners within 90 days of the fiscal year-end. Until cumulative distributions equal 100% of the gross proceeds limited partners paid for their units (the Initial Period), the remaining 10% is retained for partnership purposes. After the Initial Period, that 10% is applied to redeem First Secured Mortgage Debentures until fully redeemed, after which it reverts to partnership purposes. In the established Canada vehicle, where a distribution is declared, the partnership pays at least 90% of the fiscal year's Distributable Income to limited partners within 90 days of the fiscal year-end. Until cumulative distributions equal 100% of the gross proceeds limited partners paid for their units (the Initial Period), the remaining 10% is retained for partnership purposes. After the Initial Period, that 10% is applied to redeem First Secured Mortgage Debentures until fully redeemed, after which it reverts to partnership purposes. ## Suspension protocol