Archive for March, 2021

New Issue: PVS SplitShare, 4.40%, Seven-Year

Saturday, March 20th, 2021

Partners Value Split Corp. has announced:

that it has entered into an agreement to sell 4,000,000 Class AA Preferred Shares, Series 12 (the “Series 12 Preferred Shares”) to a syndicate of underwriters led by Scotiabank, BMO Capital Markets, CIBC Capital Markets, RBC Capital Markets and TD Securities Inc. on a bought deal basis.

The Series 12 Preferred Shares will be issued at a price of $25.00 per share, for gross proceeds of $100,000,000. The Series 12 Preferred Shares will carry a fixed coupon of 4.40% and will have a final maturity of February 29, 2028. The Series 12 Preferred Shares are expected to receive a provisional rating of Pfd-2 (low) from DBRS Limited. The net proceeds of the offering will be used to partially fund the redemption of the Company’s Class AA Preferred Shares, Series 7.

The Company has granted the underwriters an over-allotment option to purchase up to an additional 600,000 Series 12 Preferred Shares at the same offering price, exercisable in whole or part at any time for a period of up to 30 days following closing of the offering, which, if exercised in full, would increase the gross offering size to $115,000,000. Closing of the offering is expected to occur on or about April 12, 2021.

The Company owns a portfolio consisting of approximately 119,611,000 Class A Limited Voting Shares of Brookfield Asset Management Inc. (the “Brookfield Shares”) which is expected to yield quarterly dividends that are sufficient to fund quarterly fixed cumulative preferential dividends for the holders of the Company’s preferred shares and to enable the holders of the Company’s capital shares to participate in any capital appreciation of the Brookfield Shares. Brookfield Asset Management Inc. (“BAM”) is a leading global alternative asset manager with approximately US$600 billion of assets under management across real estate, infrastructure, renewable power, private equity and credit. BAM owns and operates long-life assets and businesses, many of which form the backbone of the global economy. Utilizing its global reach, access to large-scale capital and operational expertise, BAM offers a range of alternative investment products to investors around the world—including public and private pension plans, endowments and foundations, sovereign wealth funds, financial institutions, insurance companies and private wealth investors. BAM is listed on the New York Stock Exchange and Toronto Stock Exchange under the symbol BAM and BAM.A respectively.

Given that the directors and officers of PVS:

  • Frank N.C. Lochan
  • James L.R. Kelly
  • Ralph J. Zarboni
  • Brian D. Lawson
  • Leslie Yuen
  • Bryan Sinclair
  • Loretta M. Corso

continue to be a useless pack of bozos, this information is not yet available on the company website.

Update, 2021-3-22: Wonder of wonders, there is actually an update to this press release posted on their website! Partners Value Split Corp. has announced:

that as a result of strong investor demand for its previously announced offering, it has agreed to increase the size of the offering and sell 6,000,000 Class AA Preferred Shares, Series 12 (the “Series 12 Preferred Shares”) to a syndicate of underwriters led by Scotiabank, BMO Capital Markets, CIBC Capital Markets, RBC Capital Markets and TD Securities Inc. on a bought deal basis.

The Series 12 Preferred Shares will be issued at a price of $25.00 per share, for gross proceeds of $150,000,000. The Series 12 Preferred Shares will carry a fixed coupon of 4.40% and will have a final maturity of February 29, 2028. The Series 12 Preferred Shares are expected to receive a provisional rating of Pfd-2 (low) from DBRS Limited. The net proceeds of the offering will be used to fund the redemption of the Company’s Class AA Preferred Shares, Series 7.

The Company has granted the underwriters an over-allotment option to purchase up to an additional 900,000 Series 12 Preferred Shares at the same offering price, exercisable in whole or part at any time for a period of up to 30 days following closing of the offering, which, if exercised in full, would increase the gross offering size to $172,500,000. Closing of the offering is expected to occur on or about April 12, 2021.

FN.PR.A / FN.PR.B : 2% Net Conversion To FixedReset

Saturday, March 20th, 2021

First National Financial Corporation has announced:

that 399,700 of its outstanding cumulative 5-year rate reset Class A Preference Shares, Series 1 (“Series 1 Preference Shares”) were tendered for conversion, on a one-for-one basis, into cumulative floating rate Class A Preference Shares, Series 2 (“Series 2 Preference Shares”). The Company also announced that 497,388 of its outstanding Series 2 Preference Shares were tendered for conversion, on a one-for-one basis, into Series 1 Preference Shares.

After both conversions, effective April 1, 2021, the Company will have 2,984,835 Series 1 Preference Shares and 1,015,165 Series 2 Preference Shares outstanding and issued. The Series 1 Preference Shares will continue to be listed on the Toronto Stock Exchange (“TSX”) under the symbol FN.PR.A and the Series 2 Preference Shares will continue to be listed on the TSX under the symbol FN.PR.B.

FN.PR.A is a FixedReset, 4.65%+207, that commenced trading 2011-1-25 after being announced 2011-1-17. Notice of extension was given in February, 2016 and the issue reset to 2.79%. I recommended against conversion, but there was 28% conversion to the FloatingReset, FN.PR.B. Notice of the second extension was given in February, 2021. The issue reset at 2.895% in 2021.

FN.PR.B is a FloatingReset, Bills+207, that arose via a partial conversion from the FixedReset, FN.PR.A, in 2016.

March 19, 2021

Friday, March 19th, 2021
HIMIPref™ Preferred Indices
These values reflect the December 2008 revision of the HIMIPref™ Indices

Values are provisional and are finalized monthly
Index Mean
Current
Yield
(at bid)
Median
YTW
Median
Average
Trading
Value
Median
Mod Dur
(YTW)
Issues Day’s Perf. Index Value
Ratchet 0.00 % 0.00 % 0 0.00 0 -1.4261 % 2,304.3
FixedFloater 0.00 % 0.00 % 0 0.00 0 -1.4261 % 4,228.3
Floater 3.80 % 3.77 % 59,501 17.94 3 -1.4261 % 2,436.8
OpRet 0.00 % 0.00 % 0 0.00 0 0.0239 % 3,674.3
SplitShare 4.77 % 4.19 % 39,529 3.62 9 0.0239 % 4,387.9
Interest-Bearing 0.00 % 0.00 % 0 0.00 0 0.0239 % 3,423.6
Perpetual-Premium 5.30 % -0.91 % 77,719 0.09 21 0.0354 % 3,250.3
Perpetual-Discount 4.98 % 5.01 % 81,731 15.46 13 -0.1273 % 3,727.6
FixedReset Disc 4.35 % 3.87 % 197,074 17.20 52 -0.0035 % 2,666.7
Insurance Straight 5.00 % 4.66 % 92,280 15.46 22 -0.0473 % 3,643.8
FloatingReset 2.95 % 3.27 % 49,832 19.07 2 0.7363 % 2,424.5
FixedReset Prem 5.06 % 3.66 % 242,543 1.01 26 0.0331 % 2,730.8
FixedReset Bank Non 1.81 % 2.57 % 227,586 0.86 1 -0.3201 % 2,881.6
FixedReset Ins Non 4.42 % 3.86 % 149,195 17.43 22 -0.4497 % 2,788.0
Performance Highlights
Issue Index Change Notes
IFC.PR.C FixedReset Ins Non -4.17 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2051-03-19
Maturity Price : 21.51
Evaluated at bid price : 21.85
Bid-YTW : 4.19 %
BAM.PR.K Floater -2.80 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2051-03-19
Maturity Price : 11.09
Evaluated at bid price : 11.09
Bid-YTW : 3.86 %
MFC.PR.L FixedReset Ins Non -2.45 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2051-03-19
Maturity Price : 21.10
Evaluated at bid price : 21.10
Bid-YTW : 3.90 %
MFC.PR.F FixedReset Ins Non -1.81 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2051-03-19
Maturity Price : 16.82
Evaluated at bid price : 16.82
Bid-YTW : 3.63 %
TRP.PR.C FixedReset Disc -1.74 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2051-03-19
Maturity Price : 13.58
Evaluated at bid price : 13.58
Bid-YTW : 4.48 %
BAM.PF.A FixedReset Disc -1.52 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2051-03-19
Maturity Price : 22.31
Evaluated at bid price : 22.71
Bid-YTW : 4.47 %
BAM.PR.R FixedReset Disc -1.33 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2051-03-19
Maturity Price : 17.80
Evaluated at bid price : 17.80
Bid-YTW : 4.68 %
TRP.PR.A FixedReset Disc -1.29 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2051-03-19
Maturity Price : 16.80
Evaluated at bid price : 16.80
Bid-YTW : 4.55 %
MFC.PR.I FixedReset Ins Non -1.18 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2051-03-19
Maturity Price : 23.96
Evaluated at bid price : 24.33
Bid-YTW : 4.02 %
RY.PR.J FixedReset Disc 1.07 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2051-03-19
Maturity Price : 23.10
Evaluated at bid price : 24.64
Bid-YTW : 3.61 %
TD.PF.E FixedReset Disc 1.13 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2051-03-19
Maturity Price : 22.83
Evaluated at bid price : 24.07
Bid-YTW : 3.84 %
SLF.PR.J FloatingReset 1.53 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2051-03-19
Maturity Price : 14.60
Evaluated at bid price : 14.60
Bid-YTW : 2.59 %
Volume Highlights
Issue Index Shares
Traded
Notes
RY.PR.Z FixedReset Disc 223,000 YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2051-03-19
Maturity Price : 22.42
Evaluated at bid price : 23.00
Bid-YTW : 3.57 %
RY.PR.J FixedReset Disc 119,000 YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2051-03-19
Maturity Price : 23.10
Evaluated at bid price : 24.64
Bid-YTW : 3.61 %
RY.PR.S FixedReset Disc 82,200 YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2051-03-19
Maturity Price : 23.20
Evaluated at bid price : 24.50
Bid-YTW : 3.60 %
TD.PF.A FixedReset Disc 81,100 YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2051-03-19
Maturity Price : 22.31
Evaluated at bid price : 22.90
Bid-YTW : 3.63 %
BAM.PR.R FixedReset Disc 63,000 YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2051-03-19
Maturity Price : 17.80
Evaluated at bid price : 17.80
Bid-YTW : 4.68 %
IAF.PR.I FixedReset Ins Non 51,400 YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2051-03-19
Maturity Price : 23.50
Evaluated at bid price : 24.80
Bid-YTW : 3.82 %
There were 54 other index-included issues trading in excess of 10,000 shares.
Wide Spread Highlights
Issue Index Quote Data and Yield Notes
BAM.PR.R FixedReset Disc Quote: 17.80 – 18.62
Spot Rate : 0.8200
Average : 0.5106

YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2051-03-19
Maturity Price : 17.80
Evaluated at bid price : 17.80
Bid-YTW : 4.68 %

IFC.PR.C FixedReset Ins Non Quote: 21.85 – 22.75
Spot Rate : 0.9000
Average : 0.5973

YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2051-03-19
Maturity Price : 21.51
Evaluated at bid price : 21.85
Bid-YTW : 4.19 %

MFC.PR.L FixedReset Ins Non Quote: 21.10 – 21.93
Spot Rate : 0.8300
Average : 0.5818

YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2051-03-19
Maturity Price : 21.10
Evaluated at bid price : 21.10
Bid-YTW : 3.90 %

TRP.PR.A FixedReset Disc Quote: 16.80 – 17.30
Spot Rate : 0.5000
Average : 0.2840

YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2051-03-19
Maturity Price : 16.80
Evaluated at bid price : 16.80
Bid-YTW : 4.55 %

BAM.PF.A FixedReset Disc Quote: 22.71 – 23.29
Spot Rate : 0.5800
Average : 0.3834

YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2051-03-19
Maturity Price : 22.31
Evaluated at bid price : 22.71
Bid-YTW : 4.47 %

BMO.PR.F FixedReset Prem Quote: 25.76 – 26.24
Spot Rate : 0.4800
Average : 0.3030

YTW SCENARIO
Maturity Type : Call
Maturity Date : 2024-05-25
Maturity Price : 25.00
Evaluated at bid price : 25.76
Bid-YTW : 4.20 %

OSFI Revises Rules for LRCNs; Finally Provides Information for Insurers

Friday, March 19th, 2021

The Office of the Superintendant of Financial Institutions Canada (OSFI) has announced:

OSFI has published an update to its July 18, 2020 capital ruling on the Limited Recourse Capital Notes (LRCNs). The revised ruling now addresses LRCN issuances from institutions of all sizes and across different industry sectors.

The revisions include a number of clarifications to the ruling’s conditions and limitations, which are part of OSFI’s prudent approach to assessing the quality and quantity of financial instruments used as regulatory capital. This is consistent with our mandate to protect the rights and interests of depositors, policyholders and financial institution creditors, while also allowing financial institutions to compete effectively and take reasonable risks.

The ruling continues to conclude that federally regulated financial institutions may recognize the LRCNs as regulatory capital subject to the capital treatment, conditions and limitations set out in the revised ruling. Should you have any questions, please contact CapitalConfirmations@osfi-bsif.gc.ca.

The new limits are set out in the appendix to the new rules:

LRCN Issuance Limitations by FRFI Sector
Note: For life insurers, the following limitations supplement and are subject to any existing capital composition limits set out in OSFI’s capital guidelines. P&C insurers and mortgage insurers should consult OSFI’s Capital Division in respect of the limitations applicable to any prospective LRCN issuances.

FRFI
Sector
Regulatory
Capital
Treatment
LRCN Issuance Cap Floor
Deposit-
Taking
Institutions
AT1 Greater of $150 million, 0.75%
RWA, or 50% of the
institution’s aggregate net AT1
capital
Lesser of 0.30% RWA or 20% of
the institution’s aggregate AT1
capital
Life Tier 1 Capital
other than
Common
Shares
Greater of $150 million or
12.5% of Net Tier 1 capital
5.0% of Net Tier 1 capital

The “Floor” has the following effect:

The Cap may be removed with the prior approval of OSFI’s Capital Division. In seeking this approval, a FRFI must demonstrate that it has issued institutional preferred shares and/or other Additional Tier 1 capital instruments (other than LRCNs) targeted towards institutional investors that, in aggregate, are no less than the applicable limit, or Floor, set out in the Appendix. If the FRFI’s outstanding institutional preferred shares and/or other Additional Tier 1 capital instruments issued to institutional investors were to subsequently drop below the Floor, the FRFI would not be permitted to issue additional LRCNs in excess of the Cap until it has re-established compliance with the Floor. The Floor will not apply where the LRCNs are issued exclusively to a FRFI’s affiliates.

NA.PR.X To Be Redeemed

Friday, March 19th, 2021

National Bank of Canada has announced:

its intention, subject to approval from the Office of the Superintendent of Financial Institutions, to redeem all of its 16,000,000 issued and outstanding Non-Cumulative 5-Year Rate Reset First Preferred Shares Series 34 (Non-Viability Contingent Capital (NVCC)) (the “Preferred Shares Series 34”) on May 15, 2021, for cash at a redemption price of $25.00 per share, together with all declared and unpaid dividends.

The quarterly dividend of $0.35 per Preferred Share Series 34 declared on February 24, 2021 is the final dividend on the Preferred Shares Series 34, and is payable in the usual manner on May 15, 2021 to shareholders of record on April 5, 2021, as previously announced.

Since May 15, 2021 is not a business day, amounts due to holders of Preferred Shares 34 on that date will be paid on the first business day following that date, namely, Monday, May 17, 2021.

Formal notice will be given to holders of Preferred Shares Series 34 in accordance with the terms of the shares.

The redemption of the Preferred Shares Series 34 is part of National Bank’s ongoing management of its regulatory capital.

NA.PR.X is a FixedReset, 5.60%+490, that commenced trading 2016-1-22 after being announced 2016-1-13.

Thanks to Assiduous Reader CanSiamCyp for ensuring I did not miss this.

March 18, 2021

Thursday, March 18th, 2021
HIMIPref™ Preferred Indices
These values reflect the December 2008 revision of the HIMIPref™ Indices

Values are provisional and are finalized monthly
Index Mean
Current
Yield
(at bid)
Median
YTW
Median
Average
Trading
Value
Median
Mod Dur
(YTW)
Issues Day’s Perf. Index Value
Ratchet 0.00 % 0.00 % 0 0.00 0 0.6149 % 2,337.7
FixedFloater 0.00 % 0.00 % 0 0.00 0 0.6149 % 4,289.5
Floater 3.74 % 3.74 % 59,408 18.00 3 0.6149 % 2,472.1
OpRet 0.00 % 0.00 % 0 0.00 0 -0.1148 % 3,673.5
SplitShare 4.77 % 4.28 % 39,422 3.62 9 -0.1148 % 4,386.9
Interest-Bearing 0.00 % 0.00 % 0 0.00 0 -0.1148 % 3,422.8
Perpetual-Premium 5.31 % -0.61 % 74,863 0.09 21 0.0205 % 3,249.2
Perpetual-Discount 4.97 % 5.00 % 82,183 15.48 13 0.0350 % 3,732.3
FixedReset Disc 4.35 % 3.89 % 191,374 17.22 52 0.3259 % 2,666.8
Insurance Straight 4.99 % 4.59 % 91,152 4.61 22 0.1165 % 3,645.6
FloatingReset 2.97 % 3.27 % 49,259 19.08 2 -0.2670 % 2,406.8
FixedReset Prem 5.06 % 3.57 % 236,694 1.01 26 0.1054 % 2,729.9
FixedReset Bank Non 1.81 % 2.17 % 220,845 0.43 1 -0.0400 % 2,890.8
FixedReset Ins Non 4.40 % 3.84 % 148,344 17.44 22 0.1916 % 2,800.6
Performance Highlights
Issue Index Change Notes
BAM.PR.R FixedReset Disc 1.12 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2051-03-18
Maturity Price : 18.04
Evaluated at bid price : 18.04
Bid-YTW : 4.62 %
SLF.PR.G FixedReset Ins Non 1.22 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2051-03-18
Maturity Price : 14.98
Evaluated at bid price : 14.98
Bid-YTW : 3.85 %
BAM.PF.G FixedReset Disc 1.23 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2051-03-18
Maturity Price : 20.52
Evaluated at bid price : 20.52
Bid-YTW : 4.55 %
CM.PR.Q FixedReset Disc 1.70 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2051-03-18
Maturity Price : 22.78
Evaluated at bid price : 23.90
Bid-YTW : 3.79 %
BAM.PF.F FixedReset Disc 6.26 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2051-03-18
Maturity Price : 21.76
Evaluated at bid price : 22.07
Bid-YTW : 4.42 %
Volume Highlights
Issue Index Shares
Traded
Notes
RY.PR.Z FixedReset Disc 218,000 YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2051-03-18
Maturity Price : 22.41
Evaluated at bid price : 22.98
Bid-YTW : 3.57 %
RY.PR.Q FixedReset Prem 196,000 YTW SCENARIO
Maturity Type : Call
Maturity Date : 2021-05-24
Maturity Price : 25.00
Evaluated at bid price : 25.32
Bid-YTW : 0.32 %
TD.PF.A FixedReset Disc 171,000 YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2051-03-18
Maturity Price : 22.37
Evaluated at bid price : 23.00
Bid-YTW : 3.61 %
BMO.PR.S FixedReset Disc 86,400 YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2051-03-18
Maturity Price : 22.65
Evaluated at bid price : 23.40
Bid-YTW : 3.63 %
PVS.PR.D SplitShare 84,900 YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2021-10-08
Maturity Price : 25.00
Evaluated at bid price : 25.30
Bid-YTW : 2.55 %
BNS.PR.E FixedReset Prem 81,200 YTW SCENARIO
Maturity Type : Call
Maturity Date : 2021-04-25
Maturity Price : 25.00
Evaluated at bid price : 25.29
Bid-YTW : 1.57 %
There were 61 other index-included issues trading in excess of 10,000 shares.
Wide Spread Highlights
Issue Index Quote Data and Yield Notes
SLF.PR.G FixedReset Ins Non Quote: 14.98 – 15.75
Spot Rate : 0.7700
Average : 0.5272

YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2051-03-18
Maturity Price : 14.98
Evaluated at bid price : 14.98
Bid-YTW : 3.85 %

MFC.PR.C Insurance Straight Quote: 24.42 – 24.68
Spot Rate : 0.2600
Average : 0.1605

YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2051-03-18
Maturity Price : 24.16
Evaluated at bid price : 24.42
Bid-YTW : 4.62 %

PVS.PR.F SplitShare Quote: 25.45 – 25.65
Spot Rate : 0.2000
Average : 0.1369

YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2024-09-30
Maturity Price : 25.00
Evaluated at bid price : 25.45
Bid-YTW : 4.31 %

PVS.PR.E SplitShare Quote: 25.65 – 25.89
Spot Rate : 0.2400
Average : 0.1784

YTW SCENARIO
Maturity Type : Call
Maturity Date : 2021-04-17
Maturity Price : 25.50
Evaluated at bid price : 25.65
Bid-YTW : 0.20 %

BIP.PR.B FixedReset Prem Quote: 25.81 – 26.19
Spot Rate : 0.3800
Average : 0.3206

YTW SCENARIO
Maturity Type : Call
Maturity Date : 2025-12-31
Maturity Price : 25.00
Evaluated at bid price : 25.81
Bid-YTW : 4.72 %

IFC.PR.I Perpetual-Premium Quote: 26.00 – 26.59
Spot Rate : 0.5900
Average : 0.5388

YTW SCENARIO
Maturity Type : Call
Maturity Date : 2029-03-31
Maturity Price : 25.00
Evaluated at bid price : 26.00
Bid-YTW : 4.79 %

EML.PR.A Redemption Confirmed

Thursday, March 18th, 2021

The Empire Life Insurance Company has announced (on March 3, but inexplicably not yet on their website):

that it will exercise its right to redeem all of its 5,980,000 outstanding Non-Cumulative Rate Reset Preferred Shares, Series 1 (the “Preferred Shares Series 1”) on Saturday, April 17, 2021 at the price of $25.00 per Preferred Share Series 1 for an aggregate total of $149,500,000, plus declared and unpaid dividends.

On February 24, 2021, Empire Life announced that a dividend of $0.359375 per Preferred Shares Series 1 had been declared. This will be the final dividend on the Preferred Shares Series 1, and will be paid in the usual manner to shareholders of record on March 18, 2021, as previously announced. After April 17, 2021, the Preferred Shares Series 1 will cease to be entitled to dividends and the only remaining rights of holders of such shares will be to receive payment of the redemption amount.

Given April 17, 2021 is a Saturday, payment of the final dividend and the redemption amount will be made as noted above on Monday, April 19, 2021.

The Preferred Shares Series 1 are currently listed for trading on the Toronto Stock Exchange under the symbol EML.PR.A and will be de-listed from the TSX, as at the close of trading on Friday, April 16, 2021.

Beneficial holders of Preferred Shares Series 1 should contact the financial institution, broker or other intermediary through which they hold these shares to confirm how they will receive their redemption proceeds.

The company had previously announced their intention to redeem this issue, given successful OSFI approval of, and market sale of, an issue of LRCNs.

EML.PR.A is a FixedReset, 5.75%+499, that commenced trading 2016-2-16 after being announced 2016-1-25.

Thanks to Assiduous Reader CanSiamCyp for ensuring I did not miss this.

March 17, 2021

Wednesday, March 17th, 2021

PerpetualDiscounts now yield 5.00%, equivalent to 6.50% interest at the standard equivalency factor of 1.3x. Long corporates now yield 3.37%, so the pre-tax interest-equivalent spread (in this context, the “Seniority Spread”) is slightly (and perhaps spuriously) narrower at 315bp than the 320bp reported March 10.

HIMIPref™ Preferred Indices
These values reflect the December 2008 revision of the HIMIPref™ Indices

Values are provisional and are finalized monthly
Index Mean
Current
Yield
(at bid)
Median
YTW
Median
Average
Trading
Value
Median
Mod Dur
(YTW)
Issues Day’s Perf. Index Value
Ratchet 0.00 % 0.00 % 0 0.00 0 -0.2337 % 2,323.4
FixedFloater 0.00 % 0.00 % 0 0.00 0 -0.2337 % 4,263.3
Floater 3.77 % 3.76 % 59,709 17.96 3 -0.2337 % 2,457.0
OpRet 0.00 % 0.00 % 0 0.00 0 -0.3713 % 3,677.7
SplitShare 4.77 % 4.11 % 38,931 3.63 9 -0.3713 % 4,391.9
Interest-Bearing 0.00 % 0.00 % 0 0.00 0 -0.3713 % 3,426.8
Perpetual-Premium 5.31 % -0.68 % 75,768 0.09 21 0.0429 % 3,248.5
Perpetual-Discount 4.97 % 5.00 % 81,102 15.47 13 0.0032 % 3,731.0
FixedReset Disc 4.37 % 3.87 % 191,790 17.22 52 0.4153 % 2,658.1
Insurance Straight 5.00 % 4.64 % 87,209 15.50 22 0.2281 % 3,641.3
FloatingReset 2.96 % 3.27 % 48,835 19.08 2 0.2677 % 2,413.3
FixedReset Prem 5.07 % 3.69 % 237,229 1.01 26 0.0437 % 2,727.0
FixedReset Bank Non 1.80 % 2.06 % 204,480 0.44 1 0.0801 % 2,892.0
FixedReset Ins Non 4.41 % 3.86 % 149,304 17.42 22 0.0896 % 2,795.2
Performance Highlights
Issue Index Change Notes
BAM.PF.F FixedReset Disc -6.23 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2051-03-17
Maturity Price : 20.77
Evaluated at bid price : 20.77
Bid-YTW : 4.72 %
RS.PR.A SplitShare -3.00 % YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2025-12-31
Maturity Price : 10.00
Evaluated at bid price : 10.33
Bid-YTW : 4.76 %
TRP.PR.C FixedReset Disc -1.37 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2051-03-17
Maturity Price : 13.71
Evaluated at bid price : 13.71
Bid-YTW : 4.44 %
IFC.PR.C FixedReset Ins Non -1.31 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2051-03-17
Maturity Price : 22.02
Evaluated at bid price : 22.60
Bid-YTW : 4.03 %
IFC.PR.G FixedReset Ins Non -1.29 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2051-03-17
Maturity Price : 22.47
Evaluated at bid price : 22.90
Bid-YTW : 4.04 %
CM.PR.Q FixedReset Disc -1.26 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2051-03-17
Maturity Price : 22.58
Evaluated at bid price : 23.50
Bid-YTW : 3.87 %
MFC.PR.H FixedReset Ins Non 1.05 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2051-03-17
Maturity Price : 24.68
Evaluated at bid price : 25.01
Bid-YTW : 4.15 %
TRP.PR.D FixedReset Disc 1.09 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2051-03-17
Maturity Price : 19.41
Evaluated at bid price : 19.41
Bid-YTW : 4.55 %
BIP.PR.E FixedReset Disc 1.38 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2051-03-17
Maturity Price : 23.56
Evaluated at bid price : 24.95
Bid-YTW : 4.94 %
CIU.PR.A Perpetual-Discount 1.57 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2051-03-17
Maturity Price : 23.69
Evaluated at bid price : 24.00
Bid-YTW : 4.81 %
TD.PF.K FixedReset Disc 1.66 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2051-03-17
Maturity Price : 23.24
Evaluated at bid price : 24.45
Bid-YTW : 3.80 %
BAM.PR.R FixedReset Disc 1.94 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2051-03-17
Maturity Price : 17.84
Evaluated at bid price : 17.84
Bid-YTW : 4.67 %
TD.PF.E FixedReset Disc 2.18 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2051-03-17
Maturity Price : 22.78
Evaluated at bid price : 23.95
Bid-YTW : 3.86 %
TRP.PR.E FixedReset Disc 6.72 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2051-03-17
Maturity Price : 19.21
Evaluated at bid price : 19.21
Bid-YTW : 4.55 %
PWF.PR.P FixedReset Disc 15.00 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2051-03-17
Maturity Price : 14.95
Evaluated at bid price : 14.95
Bid-YTW : 4.16 %
Volume Highlights
Issue Index Shares
Traded
Notes
NA.PR.X FixedReset Prem 114,300 YTW SCENARIO
Maturity Type : Call
Maturity Date : 2021-05-15
Maturity Price : 25.00
Evaluated at bid price : 25.29
Bid-YTW : 1.25 %
RY.PR.Q FixedReset Prem 112,479 YTW SCENARIO
Maturity Type : Call
Maturity Date : 2021-05-24
Maturity Price : 25.00
Evaluated at bid price : 25.25
Bid-YTW : 1.81 %
SLF.PR.I FixedReset Ins Non 83,090 YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2051-03-17
Maturity Price : 23.22
Evaluated at bid price : 23.85
Bid-YTW : 3.90 %
BAM.PR.C Floater 65,095 YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2051-03-17
Maturity Price : 11.40
Evaluated at bid price : 11.40
Bid-YTW : 3.76 %
TD.PF.I FixedReset Disc 64,100 YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2051-03-17
Maturity Price : 23.73
Evaluated at bid price : 25.10
Bid-YTW : 4.01 %
BAM.PR.B Floater 56,625 YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2051-03-17
Maturity Price : 11.35
Evaluated at bid price : 11.35
Bid-YTW : 3.77 %
There were 34 other index-included issues trading in excess of 10,000 shares.
Wide Spread Highlights
Issue Index Quote Data and Yield Notes
BAM.PF.F FixedReset Disc Quote: 20.77 – 22.35
Spot Rate : 1.5800
Average : 0.8711

YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2051-03-17
Maturity Price : 20.77
Evaluated at bid price : 20.77
Bid-YTW : 4.72 %

PWF.PR.T FixedReset Disc Quote: 21.77 – 22.88
Spot Rate : 1.1100
Average : 0.6616

YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2051-03-17
Maturity Price : 21.43
Evaluated at bid price : 21.77
Bid-YTW : 4.06 %

BAM.PR.T FixedReset Disc Quote: 18.18 – 19.15
Spot Rate : 0.9700
Average : 0.6687

YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2051-03-17
Maturity Price : 18.18
Evaluated at bid price : 18.18
Bid-YTW : 4.60 %

CM.PR.Q FixedReset Disc Quote: 23.50 – 23.96
Spot Rate : 0.4600
Average : 0.3137

YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2051-03-17
Maturity Price : 22.58
Evaluated at bid price : 23.50
Bid-YTW : 3.87 %

PVS.PR.I SplitShare Quote: 25.56 – 25.88
Spot Rate : 0.3200
Average : 0.2301

YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2025-10-31
Maturity Price : 25.00
Evaluated at bid price : 25.56
Bid-YTW : 4.26 %

CU.PR.I FixedReset Prem Quote: 26.00 – 26.40
Spot Rate : 0.4000
Average : 0.3116

YTW SCENARIO
Maturity Type : Call
Maturity Date : 2025-12-01
Maturity Price : 25.00
Evaluated at bid price : 26.00
Bid-YTW : 3.63 %

RCI Bids For SJR

Wednesday, March 17th, 2021

Rogers Communications Inc. and Shaw Communications Inc. have announced:

  • Rogers to acquire all issued and outstanding Class A Shares and Class B Shares of Shaw for a price of $40.50 per share in cash, amounting to approximately $20 billion, which reflects a premium of approximately 70% to Shaw’s recent Class B Share price
  • Transaction valued at approximately $26 billion inclusive of approximately $6 billion of Shaw debt, equivalent to 10.7x 2021 Calendar Year EBITDA based on latest consensus estimates, or 7.6x post synergies

  • Transaction to be funded by cash consideration of $40.50 to all shareholders, with the exception of approximately 60% of the Shaw family shares which will be exchanged for 23.6 million Class B Shares of Rogers at an exchange ratio of 0.70 reflecting the volume weighted average trading price of Rogers shares over the last 10 days
  • The transaction is not conditional upon financing, as Rogers has secured committed financing to cover the cash consideration
  • Pro forma leverage on closing is expected to be just over 5x and Rogers expects to maintain its investment grade rating

Alexandra Posadzki comments in the Globe:

Rogers Communications Inc. (RCI-B-T +5.65% increase) may have to sell off some wireless assets to get its $20.4-billion bid for Shaw Communications Inc. (SJR-B-T +2.51%increase) past a government that has been pushing to increase wireless competition and reduce cellphone bills, analysts say.

The deal announced on Monday is likely to face significant regulatory hurdles, analysts said, because it would eliminate Canada’s fourth-largest wireless carrier, Shaw-owned Freedom Mobile. The regional carrier – which operates in Ontario, Alberta and British Columbia – has been credited with driving price competition in recent years.

She commented later:

The announcement comes three weeks ahead of the April 6 deadline for telecoms to pay their deposits if they wish to participate in the June auction for airwaves critical for 5G. Experts say the deal raises questions about Shaw’s ability to bid on licenses for the 3,500-megahertz spectrum – airwaves used to transmit wireless signals.

“Based on a reading of the auction rules, there is a non-negligible possibility that the announced merger may jeopardize Shaw’s participation as a stand-alone entity in the upcoming spectrum auction,” Johanne Lemay, co-president of telecom consultancy Lemay-Yates Associates Inc., said in an e-mail.

The 3,500-MHz band is a key one for the delivery of fifth-generation wireless services because it can carry large volumes of data over long distances.

“Sitting out this auction could make or break a company,” said Gregory Taylor, a spectrum expert and associate professor at the University of Calgary. “If Shaw were out of this auction and then somehow the deal does not go through, Shaw is in big trouble.”

DBRS has placed Shaw under Review-Developing:

DBRS Limited (DBRS Morningstar) placed all ratings of Shaw Communications Inc. (Shaw or the Company) Under Review with Developing Implications following the announcement of an agreement to combine Shaw with Rogers Communications Inc. (Rogers; rated BBB (high) and Under Review with Negative Implications by DBRS Morningstar) in a $26 billion transaction (including the assumption of approximately $6 billion of Shaw’s debt; the Transaction). The closing of the Transaction is subject to a series of approvals including regulatory considerations and is expected to close by the first half of 2022.

The status of Under Review with Developing Implications reflects Rogers’ potential assumption of approximately $6 billion of Shaw’s debt should the Transaction close according to terms substantially similar to those proposed. DBRS Morningstar expects Shaw’s debt will effectively rank pari passu with Rogers’ existing senior unsecured indebtedness.

DBRS Morningstar will proceed with its review as more information becomes available and aims to resolve the Under Review status by the closing of the Transaction.

… and placed Rogers under Review-Negative:

DBRS Limited (DBRS Morningstar) placed all ratings of Rogers Communications Inc. (Rogers or the Company) Under Review with Negative Implications following the Company’s announcement of an agreement to combine Rogers with Shaw Communications Inc. (Shaw; rated BBB and Under Review with Developing Implications by DBRS Morningstar) in a $26 billion transaction (including the assumption of approximately $6 billion of Shaw’s debt; the Transaction). The closing of the Transaction is subject to a series of approvals including regulatory considerations and is expected to close by the first half of 2022.

DBRS Morningstar notes that under the Arrangement Agreement, Rogers has the right to cause Shaw to redeem the Company’s outstanding preferred shares on June 30, 2021 (valued at $293 million as of Q4 F2020) in accordance with its terms by providing written notice to Shaw. As of the date of this press release, Rogers has not exercised this right.

The Under Review with Negative Implications status reflects DBRS Morningstar’s view that while Rogers’ business profile should benefit from increased scale, an enlarged geographic footprint, and enhanced spectrum license portfolio and potential cost synergies, the benefits do not completely offset the risks associated with the initial increase in financial leverage as lease-adjusted debt-to-EBITDA may increase above 5.0 times on an unadjusted basis and assuming leveraged acquisition.

In its review, DBRS Morningstar will focus on (1) assessing the business risk profile of the combined entity as well as the risks associated with integration and realization of synergy potential; (2) Rogers’ financial risk profile on a pro forma basis, including free cash flow-generating capacity of the combined entity; and (3) the Company’s longer-term business strategy and financial management intentions going forward.

Affected issues are SJR.PR.A and SJR.PR.B

Standard & Poor’s comments:

  • On March 15, 2021, Canadian cable and national wireless operator Rogers Communications Inc. (RCI) announced that it had agreed to acquire Canadian cable operator Shaw Communications Inc. for about C$26 billion. We expect initial leverage to be above 5x–almost two categories higher than RCI’s current leverage.
  • We predict long-term benefits for RCI, in terms of its pro forma scale and market share, reflecting the combined national network(s) and spectrum position for 5G wireless.
  • However, integration and transition risks, potential restructuring costs, and spectrum investments could result in subdued discretionary free operating cash flow and materially higher leverage in the first couple of years after closing.
  • Therefore, S&P Global Ratings placed its ‘BBB+’ long-term and ‘A-2’ short-term ratings on RCI on CreditWatch with negative implications.
  • The CreditWatch placement indicates the risk of an up to two-notch downgrade of RCI.

CF Bids For RCG

Wednesday, March 17th, 2021

Canaccord Genuity Group Inc. has announced (on March 15):

that on March 9, 2021 it submitted a letter to the board of directors of RFCapital Group Inc. (TSX:RCG) (“RF Capital”) in which Canaccord Genuity proposed to purchase 100%
of the outstanding shares of RF Capital for $2.30 per share (the “Proposal”) for cash or Canaccord Genuity common shares. The Proposal represented a 31% premium to the closing price of RF Capital common shares on March 12, 2021 and a 30% premium to the volume-weighted average price for the 20 trading days ended on that date. The proposed price of $2.30 per common share is supported by the formal valuation commissioned by the special committee of RF Capital’s board of directors in connection with the recently completed transaction (the “RGMP Transaction”) between RF Capital and Richardson GMP Limited (“Richardson Wealth”). The rationale behind the Proposal is simple – on a combined basis, RF Capital and Canaccord Genuity would become the preeminent independent wealth business in Canada.

Unfortunately, RF Capital’s board of directors dismissed the Proposal on March 10, 2021 without reason. As a result, RF Capital shareholders, including its Investment Advisors (“IA”s) who, as a group, represent a significant shareholding, were not provided an opportunity to consider an offer at an attractive valuation. Representatives of Richardson Financial Group Limited (the “Richardson family”), which owns approximately 44% of the outstanding common shares of RF Capital, rejected an invitation to discuss the Proposal.

Andrew Willis comments in the Globe:

Investment dealer Canaccord Genuity Group Inc. CF-T (+1.04% increase) is taking a $367-million takeover offer for RF Capital Group Inc. RCG-T (+4.10% increase)
to the company’s public shareholders and employees, after being rebuffed by its rival’s board and largest shareholder, Winnipeg’s Richardson family.

In a bid to unite two of the country’s largest independent wealth management platforms, Toronto-based Canaccord sent RF Capital’s board a letter last Tuesday offering $2.30 a share for the company, a price 31 per cent above where its shares were trading. The following day, RF Capital’s board turned down the bid, without offering reasons, according to a news release from Canaccord on Monday detailing the previously confidential negotiations.

By making its offer public, Canaccord is trying to get these shareholders to push for a deal. Canaccord has $88-billion of client assets under management, an increase of $32-billion over the past five years.

Affected issues are CF.PR.A, CF.PR.C, RCG.PR.B and RCG.PR.C.