Archive for the ‘New Issues’ Category

New Issue: TD FixedReset, 4.50%+301, NVCC

Thursday, July 6th, 2017

The Toronto-Dominion Bank has announced (on July 5):

a domestic public offering of Non-Cumulative 5-Year Rate Reset Preferred Shares (non-viability contingent capital (NVCC)), Series 16 (the “Series 16 Shares”).

TD has entered into an agreement with a group of underwriters led by TD Securities Inc. to issue, on a bought deal basis, 12 million Series 16 Shares at a price of $25.00 per share to raise gross proceeds of $300 million. TD has also granted the underwriters an option to purchase, on the same terms, up to an additional 2 million Series 16 Shares. This option is exercisable in whole or in part by the underwriters at any time up to two business days prior to closing.

The Series 16 Shares will yield 4.50% annually, with dividends payable quarterly, as and when declared by the Board of Directors of TD, for the initial period ending October 31, 2022. Thereafter, the dividend rate will reset every five years at a level of 3.01% over the then five-year Government of Canada bond yield.

Subject to regulatory approval, on October 31, 2022 and on October 31 every 5 years thereafter, TD may redeem the Series 16 Shares, in whole or in part, at $25.00 per share. Subject to TD’s right of redemption and certain other conditions, holders of the Series 16 Shares will have the right to convert their shares into Non-Cumulative Floating Rate Preferred Shares (NVCC), Series 17 (the “Series 17 Shares”), on October 31, 2022, and on October 31 every five years thereafter. Holders of the Series 17 Shares will be entitled to receive quarterly floating rate dividends, as and when declared by the Board of Directors of TD, equal to the three-month Government of Canada Treasury Bill yield plus 3.01%.

The expected closing date is July 14, 2017. TD will make an application to list the Series 16 Shares as of the closing date on the Toronto Stock Exchange. The net proceeds of the offering will be used for general corporate purposes.

They later announced:

that, in connection with its previously announced domestic public offering of 12 million 4.50% Non-Cumulative 5-Year Rate Reset Preferred Shares (non-viability contingent capital (NVCC)), Series 16 (the “Series 16 Shares”), the underwriters have exercised their option (the “Underwriters’ Option”) to purchase an additional 2 million Series 16 Shares at a price of $25.00 per share. TD will receive additional gross proceeds of $50 million from the exercise of the Underwriters’ Option, increasing the total size of the offering to $350 million. Closing of the Underwriters’ Option is expected to occur concurrently with the closing of the public offering on July 14, 2017.

This issue has much the same problem as most other new issues: it’s expensive – at least, according to Implied Volatility for FixedResets analysis:

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The theoretical price of the new issue according to this analysis is 24.30.

New Issue: BMO FixedReset, 4.40%+317, NVCC

Wednesday, June 21st, 2017

Bank of Montreal has announced:

a domestic public offering of $400 million of Non-Cumulative 5-Year Rate Reset Class B Preferred Shares Series 42 (Non-Viability Contingent Capital (NVCC)) (the “Preferred Shares Series 42”). The offering will be underwritten on a bought-deal basis by a syndicate of underwriters led by BMO Capital Markets.

The Preferred Shares Series 42 will be issued to the public at a price of $25.00 per share. Holders will be entitled to receive non-cumulative preferential fixed quarterly dividends for the initial period to August 25, 2022, as and when declared by the Board of Directors of the Bank, payable in the amount of $0.275 per share, to yield 4.40 per cent annually.

Subject to regulatory approval, on August 25, 2022 and on August 25 of every fifth year thereafter, the Bank may redeem the Preferred Shares Series 42 in whole or in part at par. On August 25, 2022, the dividend rate will reset and will reset thereafter every five years to be equal to the 5-Year Government of Canada Bond Yield plus 3.17 per cent. Subject to certain conditions, holders may elect to convert any or all of their Preferred Shares Series 42 into an equal number of Non-Cumulative Floating Rate Class B Preferred Shares Series 43 (Non-Viability Contingent Capital (NVCC)) (“Preferred Shares Series 43”) on August 25, 2022, and on August 25 of every fifth year thereafter. Holders of the Preferred Shares Series 43 will be entitled to receive non-cumulative preferential floating rate quarterly dividends, as and when declared by the Board of Directors of the Bank, equal to the then 3-month Government of Canada Treasury Bill Yield plus 3.17 per cent. Subject to certain conditions, holders may elect to convert any or all of their Preferred Shares Series 43 into an equal number of Preferred Shares Series 42 on August 25, 2027, and on August 25 of every fifth year thereafter.

The anticipated closing date is June 29, 2017. The net proceeds from the offering will be used by the Bank for general banking purposes.

This isn’t a badly priced new issue, as new issues go, but can’t be called cheap – at least, not according to Implied Volatility for FixedResets analysis:

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According to this, the fair bid price for the new issue, given the closing bids of BMO’s other NVCC-compliant issues, is 24.84.

New Issue: NA FixedReset, 4.45%+343, NVCC

Thursday, June 1st, 2017

National Bank of Canada has announced:

that it has entered into an agreement with a group of underwriters led by National Bank Financial Inc. for the issuance on a bought deal basis of 12 million non-cumulative 5-year rate reset first preferred shares series 38 (non-viability contingent capital (NVCC)) (the “Series 38 Preferred Shares”) at a price of $25.00 per share, to raise gross proceeds of $300 million.

National Bank has granted the underwriters an option to purchase, on the same terms, up to an additional 4 million Series 38 Preferred Shares. This option is exercisable in whole or in part by the underwriters at any time up to two business days prior to closing. The gross proceeds raised under the offering will be $400 million should this option be exercised in full.

The Series 38 Preferred Shares will yield 4.45% annually, payable quarterly, as and when declared by the Board of Directors of National Bank, for the initial period ending November 15, 2022. The first of such dividends, if declared, shall be payable on November 15, 2017. Thereafter, the dividend rate will reset every five years at a level of 343 basis points over the then 5-year Government of Canada bond yield. Subject to regulatory approval, National Bank may redeem the Series 38 Preferred Shares in whole or in part at par on November 15, 2022 and on November 15 every five years thereafter.

Holders of the Series 38 Preferred Shares will have the right to convert their shares into an equal number of non-cumulative floating rate first preferred shares series 39 (non-viability contingent capital (NVCC)) (the “Series 39 Preferred Shares”), subject to certain conditions, on November 15, 2022, and on November 15 every five years thereafter. Holders of the Series 39 Preferred Shares will be entitled to receive quarterly floating dividends, as and when declared by the Board of Directors of National Bank, equal to the 90-day Government of Canada Treasury Bill rate plus 343 basis points.

The net proceeds of the offering will be used for general corporate purposes and added to National Bank’s capital base. The expected closing date is on or about June 13, 2017. National Bank intends to file in Canada a prospectus supplement to its November 21, 2016 base shelf prospectus in respect of this issue.

They later announced:

that as a result of strong investor demand for its previously announced domestic public offering of non-cumulative 5-year rate reset first preferred shares series 38 (non-viability contingent capital (NVCC)) (the “Series 38 Preferred Shares”), the underwriters have exercised their option to purchase an additional 4,000,000 Series 38 Preferred Shares. The size of the offering has been increased to 16 million shares for gross proceeds of $400 million. The offering will be underwritten by a syndicate led by National Bank Financial Inc. The expected closing date is on or about June 13, 2017.

The net proceeds of the offering will be used for general corporate purposes and added to National Bank’s capital base.

Implied Volatility analysis for FixedResets suggests that this issue should be regarded as expensive:

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The theoretical price of the new issue is 24.25.

New Issue: CM FixedReset, 4.40%+338, NVCC Compliant

Thursday, May 25th, 2017

The Canadian Imperial Bank of Commerce has announced:

that it had entered into an agreement with a group of underwriters led by CIBC World Markets Inc. for an issue of 16 million Basel III-compliant Non-cumulative Rate Reset Class A Preferred Shares, Series 45 (the “Series 45 Shares”) priced at $25.00 per Series 45 Share to raise gross proceeds of $400 million.

CIBC has granted the underwriters an option to purchase up to an additional four million Series 45 Shares at the same offering price, exercisable at any time up to two days prior to closing. Should the underwriters’ option be fully exercised, the total gross proceeds of the financing will be $500 million.

The Series 45 Shares will yield 4.40% per annum, payable quarterly, as and when declared by the Board of Directors of CIBC, for an initial period ending July 31, 2022. On July 31, 2022, and on July 31 every five years thereafter, the dividend rate will reset to be equal to the then current five-year Government of Canada bond yield plus 3.38%.

Subject to regulatory approval and certain provisions of the Series 45 Shares, on July 31, 2022 and on July 31 every five years thereafter, CIBC may, at its option, redeem all or any part of the then outstanding Series 45 Shares at par.

Subject to the right of redemption, holders of the Series 45 Shares will have the right to convert their shares into Non-cumulative Floating Rate Class A Preferred Shares, Series 46 (the “Series 46 Shares”), subject to certain conditions, on July 31, 2022 and on July 31 every five years thereafter. Holders of the Series 46 Shares will be entitled to receive a quarterly floating rate dividend, as and when declared by the Board of Directors of CIBC, equal to the three-month Government of Canada Treasury Bill yield plus 3.38%.

Holders of the Series 46 Shares may convert their Series 46 Shares into Series 45 Shares, subject to certain conditions, on July 31, 2027 and on July 31 every five years thereafter.

The expected closing date is June 2, 2017. CIBC will make an application to list the Series 45 Shares as of the closing date on the Toronto Stock Exchange. The net proceeds of this offering will be used for general purposes of CIBC.

Later, they announced:

that as a result of strong investor demand for its previously announced domestic public offering of non-cumulative Rate Reset Class A Preferred Shares, Series 45, the size of the offering has been increased to 32 million shares. The gross proceeds of the offering will now be $800 million. The offering will be underwritten by a syndicate led by CIBC World Markets Inc. The expected closing date is June 2, 2017.

The net proceeds from this transaction will be used for general purposes of CIBC.

A good sized issue!

Implied Volatility analysis for FixedResets suggests the issue may be a little expensive:

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The theoretical price implied by the above calculation is 24.76.

New Issue: PWF Straight Perpetual, 5.15%

Wednesday, May 17th, 2017

Power Financial Corporation has announced:

that it has agreed to issue 8,000,000 Non-Cumulative First Preferred Shares, Series V (the “Series V Shares”) on a bought deal basis, for gross proceeds of $200 million. The Series V Shares will be priced at $25.00 per share and will carry an annual dividend yield of 5.15%. Closing is expected to occur on or about May 26, 2017. The issue will be underwritten by a syndicate of underwriters co-led by BMO Capital Markets, RBC Capital Markets, Scotiabank and TD Securities Inc.

Power Financial has also granted the underwriters an option to purchase an additional 2,000,000 Series V Shares at the same offering price. Should the underwriters’ option be exercised fully, the total gross proceeds of the Series V Share offering will be $250 million.

Proceeds from the issue will be used to supplement Power Financial’s financial resources and for general corporate purposes.

They later announced:

that due to strong demand, the underwriters have exercised their option to purchase an additional 2,000,000 Non-Cumulative First Preferred Shares, Series V (the “Series V Shares”), which increases the size of the previously announced bought deal public offering to 10,000,000 Series V Shares for gross proceeds of $250 million. The Series V Shares will be priced at $25.00 per share and will carry an annual dividend yield of 5.15%. Closing is expected to occur on or about May 26, 2017. The issue will be underwritten by a syndicate of underwriters co-led by BMO Capital Markets, RBC Capital Markets, Scotiabank and TD Securities Inc.

Implied Volatility analysis (as derived for Straight Perpetuals) suggests that the issue is fairly priced:

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Note, however, that the implied volatility is very high at 31%, and therefore it might be expected that the higher-coupon, higher-yielding issues are the better bet, being expected to outperform on a flattening (lowering of implied volatility). However, the five issues with the highest coupons are all currently callable and are all trading with a negative yield to worst.

New Issue: ECN FixedReset 6.25%+519M625

Tuesday, May 16th, 2017

ECN Capital Corp. has announced:

that it has entered into an agreement with a syndicate of underwriters led by BMO Capital Markets, CIBC Capital Markets, National Bank Financial Inc., RBC Capital Markets and TD Securities Inc. The underwriters have agreed to buy 4,000,000 Cumulative 5-Year Minimum Rate Reset Preferred Shares, Series C (the “Series C Preferred Shares”) at a price of $25.00 per share for aggregate gross proceeds of $100,000,000. The net proceeds are expected to be used to originate and finance, directly and indirectly, finance assets, to fund future acquisitions and for general corporate purposes.
ECN Capital has granted the underwriters an option to purchase at the offering price up to an additional 1,000,000 Series C Preferred Shares exercisable, in whole or in part, at any time up to 48 hours prior to closing of the offering. Should the option be fully exercised, the total gross proceeds of the Series C Preferred Share offering will be $125,000,000.

The Series C Preferred Shares will be issued to the public at a price of $25.00 per share and holders will be entitled to receive fixed cumulative preferential cash dividends, payable by quarterly installments for an initial period of five years, as and when declared by the Board of Directors of the Corporation, at a rate of $1.5625 per share per annum, to yield 6.25% annually. Thereafter, the dividend rate will reset every five years to the sum of the then current 5-Year Government of Canada Bond yield and 5.19%, provided that, in any event, such sum shall not be less than 6.25%. On June 30, 2022, and on June 30 of every fifth year thereafter, the Corporation may redeem the Series C Preferred Shares in whole or in part at par.

Holders will have the right to elect to convert all or any of their Series C Preferred Shares into an equal number of Cumulative Floating Rate Preferred Shares, Series D (the “Series D Preferred Shares”) on June 30, 2022, and on June 30 of every fifth year thereafter. Holders of the Series D Preferred Shares will be entitled to receive quarterly floating rate cumulative preferential cash dividends, as and when declared by the Board of Directors of the Corporation, equal to the sum of the then current 3-month Government of Canada Treasury Bill yield and 5.19%. On June 30, 2027 and on June 30, of every fifth year thereafter (a “Series D Redemption Date”), the Corporation may redeem the Series D Preferred Shares in whole or in part at par. On any other date that is not a Series D Redemption Date after June 30, 2022, the Corporation may redeem the Series D Preferred Shares in whole or in part by the payment of $25.50 for each share to be redeemed.

The offering is being made only in the provinces of Canada by means of a prospectus supplement to the Corporation’s base shelf prospectus. The closing date of the offering is expected to be on or about May 25, 2017.

DBRS has assigned a Pfd-3(low) rating to the issue:

The rating reflects the Company’s solid franchise as a leading commercial lender and lessor in North America with strong origination platforms and sound risk management across multiple asset classes. The rating also considers the solid earnings generation derived from the franchise, producing more than sufficient pre-provision earnings to absorb the cost of credit with a solid cushion to absorb potentially higher losses that would be expected through the cycle, as well as unexpected losses. Funding is appropriate and aligned with the asset base, while leverage is considered low compared to peers. The Company’s reliance on secured forms of wholesale funding and execution risks associated with the Company’s evolving strategy to become more “asset-lite”, as well as the potential for entry into new business activities currently constrain the ratings.

New Issue: IFC Straight Perpetual 5.20%

Saturday, May 13th, 2017

Intact Financial Corporation has announced:

that it has entered into an agreement with a syndicate of underwriters led by CIBC Capital Markets together with BMO Capital Markets, National Bank Financial and TD Securities Inc. pursuant to which the underwriters have agreed to purchase, on a bought deal basis, 5,000,000 Non-Cumulative Class A Shares, Series 5 (the “Series 5 Shares”) from Intact for sale to the public at a price of $25.00 per Series 5 Share, representing aggregate gross proceeds of $125 million.

Intact has granted the underwriters an underwriters’ option to purchase up to an additional 1,000,000 Series 5 Shares at the same offering price. Should the underwriters’ option be fully exercised, the total gross proceeds of the Series 5 Shares offering will be $150 million.

The Series 5 Shares will yield 5.20% per annum, payable quarterly, as and when declared by the Board of Directors of the Company. The Series 5 Shares will not be redeemable prior to June 30, 2022. On and after June 30, 2022, Intact may, on not less than 30 nor more than 60 days’ notice, redeem for cash the Series 5 Shares in whole or in part, at the Company’s option, at $26.00 per share if redeemed on or after June 30, 2022 and prior to June 30, 2023; $25.75 per share if redeemed on or after June 30, 2023 and prior to June 30, 2024; $25.50 per share if redeemed on or after June 30, 2024 and prior to June 30, 2025; $25.25 per share if redeemed on or after June 30, 2025 and prior to June 30, 2026; and $25.00 per share if redeemed on or after June 30, 2026, in each case together with all declared and unpaid dividends up to but excluding the date of redemption.

The Series 5 Share offering is expected to close on May 24, 2017. The net proceeds will be used to partially fund the previously announced acquisition of OneBeacon Insurance Group, Ltd. If the acquisition does not close, the net proceeds will be used for general corporate purposes.

They later announced:

that due to strong demand, the underwriters have exercised their option to purchase an additional 1,000,000 Non-Cumulative Class A Shares, Series 5 (the “Series 5 Shares”), which increases the size of the previously announced offering to 6,000,000 Series 5 Shares in aggregate, to be offered on a bought deal basis to a syndicate of underwriters led by CIBC Capital Markets together with BMO Capital Markets, National Bank Financial and TD Securities Inc. The Series 5 Shares will be issued at a price of $25.00 per Series 5 Share, representing aggregate gross proceeds of $150 million. The Series 5 Shares will yield 5.20% per annum. The Series 5 Share offering is expected to close on May 24, 2017.

Intact recently raised $754-million to fund its purchase of OneBeacon Insurance Group, Ltd..

As this issue is not NVCC compliant, it will be analyzed as a DeemedRetractible. Note, however, that this carries more uncertainty than it does with most other insurers because Intact is a P&C insurer, not a life company.

New Issue: GWO Straight Perpetual, 5.15%

Wednesday, May 10th, 2017

Great-West Lifeco Inc. has announced:

that it has entered into an agreement with a syndicate of underwriters co-led by BMO Capital Markets, CIBC Capital Markets, Scotiabank, and TD Securities Inc. pursuant to which the underwriters have agreed to purchase, on a bought deal basis, 6,000,000 Non-Cumulative First Preferred Shares, Series T (the “Series T Shares”) from Lifeco for sale to the public at a price of $25.00 per Series T Share, representing aggregate gross proceeds of $150 million.

Lifeco has granted the underwriters an underwriters’ option to purchase an additional 2,000,000 Series T Shares at the same offering price. Should the underwriters’ option be fully exercised, the total gross proceeds of the Series T Shares offering will be $200 million.

The Series T Shares will yield 5.15% per annum, payable quarterly, as and when declared by the Board of Directors of the Company. The Series T Shares will not be redeemable prior to June 30, 2022. On and after June 30, 2022, Lifeco may, on not less than 30 nor more than 60 days’ notice, redeem for cash the Series T Shares in whole or in part, at the Company’s option, at $26.00 per share if redeemed on or after June 30, 2022 and prior to June 30, 2023; $25.75 per share if redeemed on or after June 30, 2023 and prior to June 30, 2024; $25.50 per share if redeemed on or after June 30, 2024 and prior to June 30, 2025; $25.25 per share if redeemed on or after June 30, 2025 and prior to June 30, 2026; and $25.00 per share if redeemed on or after June 30, 2026, in each case together with all declared and unpaid dividends up to but excluding the date of redemption.

The Series T Share offering is expected to close on May 18, 2017. The net proceeds will be used for general corporate purposes and to augment Lifeco’s current liquidity position.

They later announced:

that due to strong demand, the underwriters have exercised their option to purchase an additional 2,000,000 Non-Cumulative First Preferred Shares, Series T (the “Series T Shares”), which increases the size of the previously announced bought deal public offering to 8,000,000 Series T Shares for gross proceeds of $200 million. The Series T Shares will be priced at $25.00 per share and will carry an annual dividend yield of 5.15%. Closing is expected to occur on or about May 18, 2017. The issue will be underwritten by a syndicate of underwriters co-led by BMO Capital Markets, CIBC Capital Markets, Scotiabank, and TD Securities Inc.

This new issue carries the same dividend as GWO.PR.Q, which commenced trading 2012-7-6 after being announced 2012-6-28.

As this issue is not NVCC compliant, it will be analyzed as a DeemedRetractible.

I consider the following two points rather interesting when taken together:

  • GWO is generally acknowledged to be the best managed and most conservative of the big life insurers
  • GWO has issued many more Straights than FixedResets since the inception of the latter class

Implied Volatility analysis of the GWO Straights indicates that the issue is well priced, with a theoretical price of 25.02:

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New Issue: BPO FixedReset 4.85%+374M485

Thursday, April 27th, 2017

Brookfield Office Properties Inc. has announced:

that it has agreed to issue to a syndicate of underwriters led by TD Securities Inc., CIBC Capital Markets, RBC Capital Markets and Scotiabank, for distribution to the public, ten million Cumulative Minimum Rate Reset Class AAA Preference Shares, Series GG (the “Preferred Shares, Series GG”). The Preferred Shares, Series GG will be issued at a price of C$25.00 per share, for aggregate proceeds of C$250 million. Holders of the Preferred Shares, Series GG will be entitled to receive a cumulative quarterly fixed dividend yielding 4.85% annually for the initial period ending June 30, 2022. Thereafter, the dividend rate will be reset every five years at a rate equal to the greater of (i) the five-year Government of Canada bond yield plus 3.74% and (ii) 4.85%.

Holders of Preferred Shares, Series GG will have the right, at their option, to convert their shares into Cumulative Floating Rate Class AAA Preference Shares, Series HH (the “Preferred Shares, Series HH”), subject to certain conditions, on June 30, 2022 and on June 30 every five years thereafter. Holders of Preferred Shares, Series HH will be entitled to receive cumulative quarterly floating dividends at a rate equal to the 90-day Government of Canada Treasury Bill yield plus 3.74%.

The Series GG Shares and Series HH Shares will be fully and unconditionally guaranteed, jointly and severally, as to: (i) the payment of dividends, as and when declared, (ii) the payment of amounts due on redemption, and (iii) the payment of amounts due on the liquidation, dissolution or winding-up of Brookfield Office Properties, by the following entities: Brookfield Property Partners L.P., Brookfield Property L.P., Brookfield BPY Holdings Inc., Brookfield BPY Retail Holdings II Inc., BPY Bermuda Holdings Limited, BPY Bermuda Holdings II Limited, BPY Bermuda Holdings IV Limited and BPY Bermuda Holdings V Limited.

Brookfield Office Properties has granted the underwriters an option, exercisable in whole or in part anytime up to two business days prior to closing, to purchase an additional 2,000,000 Preferred Shares, Series GG at the same offering price. Should the option be fully exercised, the total gross proceeds of the financing will be C$300 million.

The Preferred Shares, Series GG will be offered in all provinces of Canada by way of a supplement to Brookfield Office Properties’ existing Canadian short form base shelf prospectus dated August 29, 2016.

The net proceeds of the issue will be used for general corporate purposes which may include the redemption of existing preferred shares. The offering is expected to close on or about May 4, 2017.

The reference to possibly using proceeds to redeem extant preferred shares may mean that BPO.PR.J, which was partially redeemed 2017-3-29 will finally disappear. But we will see!

The issue seems quite expensive to me:

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Of course, promoters will protest that I think it’s expensive because I’m assigning zero value to the minimum rate guarantee, a practice for which I have been criticized in the past. And, of course, it should be clear that as has been remarked:

I guess you mean by that that you CURRENTLY do not give much value to this feature given your conviction that interest rates will go up in the upcoming years (what we have been hearing for a quite a while now)?

So take it as you will!

New Issue: EFN FixedReset 5.75%+464M575

Thursday, April 27th, 2017

Element Fleet Management Corp. has announced:

that it has entered into an agreement with a syndicate of underwriters led by BMO Capital Markets, CIBC Capital Markets, National Bank Financial Inc., RBC Capital Markets, and TD Securities Inc. The underwriters have agreed to buy 4,000,000 Cumulative 5-Year Minimum Rate Reset Preferred Shares, Series I (the “Series I Preferred Shares”) at a price of $25.00 per share for aggregate gross proceeds of $100,000,000. The net proceeds are expected to be used to fund the growth of Element’s business and for general corporate purposes.

Element has granted the underwriters an option to purchase at the offering price up to an additional 2,000,000 Series I Preferred Shares exercisable, in whole or in part, at any time up to 48 hours prior to closing of the offering. Should the option be fully exercised, the total gross proceeds of the Series I Preferred Share offering will be $150,000,000.

The Series I Preferred Shares will be issued to the public at a price of $25.00 per share and holders will be entitled to receive fixed cumulative preferential cash dividends, payable by quarterly installments for an initial period of five years, as and when declared by the Board of Directors of the Company, at a rate of $1.4375 per share per annum, to yield 5.75% annually. Thereafter, the dividend rate will reset every five years to the sum of the then current 5-Year Government of Canada Bond yield and 4.64%, provided that, in any event, such sum shall not be less than 5.75%. On June 30, 2022, and on June 30 of every fifth year thereafter, the Company may redeem the Series I Preferred Shares in whole or in part at par.

Holders will have the right to elect to convert all or any of their Series I Preferred Shares into an equal number of Cumulative Floating Rate Preferred Shares, Series J (the “Series J Preferred Shares”) on June 30, 2022, and on June 30 of every fifth year thereafter. Holders of the Series J Preferred Shares will be entitled to receive quarterly floating rate cumulative preferential cash dividends, as and when declared by the Board of Directors of the Company, equal to the sum of the then current 3-month Government of Canada Treasury Bill yield and 4.64%. On June 30, 2027 and on June 30, of every fifth year thereafter (a “Series J Redemption Date”), the Company may redeem the Series J Preferred Shares in whole or in part at par. On any other date that is not a Series J Redemption Date after June 30, 2022, the Company may redeem the Series J Preferred Shares in whole or in part by the payment of $25.50 for each share to be redeemed.

The offering is being made only in the provinces of Canada by means of a prospectus supplement to the Company’s base shelf prospectus. The closing date of the offering is expected to be on or about May 5, 2017.

DBRS has assigned a rating of Pfd-3(high) to the issue.

The omission of Scotia from the list of dealers is interesting and consistent with most of the company’s past offerings. There’s a story there, somewhere!

The issue is attractively priced relative to other EFN issues:

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