Archive for the ‘DRIPs’ Category

CM DRIP: Preferred Dividends into Discounted Common

Tuesday, September 29th, 2009

Better late than never! The Canadian Imperial Bank of Commerce has announced (2009-5-29):

amendments to its Shareholder Investment Plan. Under the Plan, shareholders resident in Canada or the United States may elect to have dividends reinvested in
additional common shares of CIBC.

CIBC has decided to issue shares from treasury at a 3% discount from the Average Market Price (as defined in the Plan) until such time as CIBC elects otherwise. The discount applies to the distribution of common shares under the “Dividend Reinvestment Option” or “Stock Dividend Option” portions of the
Plan. The discount will not apply to shares purchased under the “Share Purchase Option” of the Plan.

Under the Plan, CIBC determines whether the additional common shares are purchased on the secondary market or are newly-issued by CIBC. Previously, shares were purchased on the secondary market with no discount from the Average Market Price.

In addition, under the amended Plan CIBC may designate certain series of CIBC preferred shares as eligible to participate in the Plan. Holders of eligible preferred shares may elect to have dividends on those preferred shares reinvested in common shares of CIBC. CIBC has designated each series of currently authorized preferred shares as eligible to participate in the Plan.

These changes will be effective starting with the dividend payable on July 28, 2009 to common and preferred shareholders of record on June 29, 2009.

Ongoing participants in the Plan will automatically have the discount applied to the reinvestment of their dividends on the July 28, 2009 payment date.

The letter to plan participants states:

The 3% discount will continue until further notice. CIBC reserves the right, in its sole discretion, to amend or cancel the discount or the Plan at any time, to determine whether common shares purchased under the Plan will be purchased on the secondary market or issued from treasury and to determine which series of CIBC preferred shares, if any, are eligible to participate in the Plan.

There does not appear to be a convenient way in which the current status of the DRIP can be checked on-line. Those interested in participating will have to check the Financial News Releases regularly, or contact Investor Relations.

The following CM preferred share issues are outstanding: CM.PR.P, CM.PR.R, CM.PR.A, CM.PR.D, CM.PR.E, CM.PR.G, CM.PR.H, CM.PR.I, CM.PR.J, CM.PR.K, CM.PR.L, CM.PR.M. All are tracked by HIMIPref™. There is also the ridiculous Series 28, which is not listed and therefore has no symbol.

SLF DRIP: Preferred Dividends into Possibly Discounted Common

Saturday, June 20th, 2009

Sun Life Financial has announced:

amendments to its Canadian Dividend Reinvestment and Share Purchase Plan (the “Plan”). The three major Plan changes are:

1. Subject to Toronto Stock Exchange (TSX) approval, Sun Life may issue common shares from treasury at a discount to the average market price to dividend reinvestment participants. At this time and until further notice, the discount will be 2%. To date, common shares issued under the Plan have been purchased through the TSX with no discount to the average market price.

2. Canadian-resident preferred shareholders will be able to participate in the Plan by electing to have dividends paid on their preferred shares reinvested in common shares of Sun Life Financial Inc.

3. Sun Life has also agreed to pay, on behalf of Plan participants, all fees associated with the Plan, other than brokerage commission payable on the sale of common shares held through the Plan.

The changes will be effective starting with the dividends payable on June 30, 2009 to common and preferred shareholders of record on May 27, 2009. The revised Plan is contained in the Amended and Restated Offering Circular which is available at www.sunlife.com or www.cibcmellon.com.

Sun Life may amend or cancel the discount at any time, and Sun Life will continue to determine whether common shares will be purchased under the Plan through the TSX (in which case the discount will not apply) or be newly-issued from treasury. No discount will apply on common shares acquired by participants through optional cash purchases.

The FAQ section of the Amended and Restated Offering Circular states:

The Corporation will announce by press release whether purchases of common shares under the Plan will be made on the open market or through treasury and the applicable discount, if any, included in the Market Price for common shares issued from treasury on a dividend reinvestment.

… while Section E.5 of the

The price that will be paid for Common Shares under the Plan on any Dividend Payment Date (the “Market Price”) will be determined as follows:

For Treasury Purchases, the Market Price will be equal to the weighted average closing trading price of the Common Shares on the Toronto Stock Exchange on the five trading days preceding the Dividend Payment Date, subject to a possible discount of up to 5% that may be applied on Treasury Purchases of Dividend Shares. No discount will apply on Treasury Purchases of Optional Cash Purchase Shares.

For Market Purchases of Dividend Shares and Optional Cash Purchase Shares, the Market Price allocated to each Plan Share, or fraction thereof, acquired by the Plan Agent under the Plan on each Dividend Payment Date will be the volume-weighted average of the applicable best efforts open market purchase price paid per Common Share by the Plan Agent for all Common Shares purchased on that Dividend Payment Date under the Plan.

The Corporation will announce by press release whether purchases of Common Shares under the Plan will be Market Purchases or Treasury Purchases and the applicable discount, if any, for Treasury Purchases of Dividend Shares.

This is, frankly, pretty useless information. I am unable to find one of the fabled press releases and suspect that they will be released only after the end of the registration period, making it impossible to plan.

I do not bother reporting reinvestment plans that do not include a discount to market price and was of two minds as to whether to report this one … but the potential is there – do with it as you see fit.

I recommend an eMail to Sun Life Shareholder Services demanding that, at the very least, the company commit itself one way or the other at time of dividend declaration.

The last mention of Sun Life preferreds in general on PrefBlog reported S&P’s one-notch bond-scale downgrade. These preferreds trade with the symbols SLF.PR.A, SLF.PR.B, SLF.PR.C, SLF.PR.D, SLF.PR.E & SLF.PR.F.

BNS DRIP: Preferred Dividends into Discounted Common

Friday, February 27th, 2009

BNS has announced (a long time ago, but hey! better late than never, right?):

On August 26, 2008, the Bank announced that participants in the Plan will receive a two per cent discount from the Average Market Price (as defined in the Plan) on the purchase of additional common shares with reinvested dividends. The discount will not apply to the purchase of common shares with the optional cash payment or interest reinvestment options of the Plan. The first dividends for which this discount will be effective are the dividends on the Bank’s common and preferred shares declared by the Board of Directors on August 26, 2008 for the quarter ending October 31, 2008. These dividends will be payable on October 29, 2008 to holders of record at the close of business on October 7, 2008. Prior to this announcement, common shares issued under the Plan have been issued with no discount to the Average Market Price (as defined in the Plan).

The two per cent discount for common shares issuable under the dividend reinvestment and stock dividend components of the Plan will continue until further notice.

RY Amends DRIP: Preferred Dividends into Discounted Common Stock

Thursday, February 26th, 2009

Royal Bank has announced:

amendments to its dividend reinvestment plan (the “plan”).

Under the plan, the bank may now offer a discount from the average market price (as defined in the plan) on the reinvestment of dividends in additional common shares issued by the bank from treasury and will provide the preferred shareholders of the bank with the opportunity to participate in the plan by electing to have the dividends paid on their preferred shares reinvested in common shares of the bank.

Under the plan, common and preferred shareholders who reside in Canada and common shareholders in the United States may elect to have dividends paid on their shares reinvested in common shares of the bank.

At this time, the bank has decided to issue shares from treasury at a three per cent discount from the average market price until such time as the bank elects otherwise. Most recently the common shares purchased under the plan have been issued from treasury with no discount to the average market price. These changes will be effective starting with the dividend, payable on May 22, 2009 to common and preferred shareholders of record on April 23, 2009.

Under the old plan (not yet modified on RY’s website), preferred shareholders could not participate.

I can see nothing in the 2008 Annual Report to indicate to what degree shareholders are participating in this. In the great scheme of things, I will assume “not much”, since with no discount there has been little or no reason for institutional shareholders to participate.

A 3% discount though – with preferred share eligibility – could make things more interesting.

Thanks to Assiduous Reader DD for bringing this to my attention!