PrefBlog

Manulife Financial Corporation has announced (on November 8):

that it does not intend to exercise its right to redeem all or any of its currently outstanding 14,000,000 Non-cumulative Rate Reset Class 1 Shares Series 17 (the “Series 17 Preferred Shares”) (TSX: MFC.PR.M) on December 19, 2019. As a result, subject to certain conditions described in the prospectus supplement dated August 11, 2014 relating to the issuance of the Series 17 Preferred Shares (the “Prospectus”), the holders of the Series 17 Preferred Shares have the right, at their option, to convert all or part of their Series 17 Preferred Shares on a one-for-one basis into Non-cumulative Floating Rate Class 1 Shares Series 18 of Manulife (the “Series 18 Preferred Shares”) on December 19, 2019. A formal notice of the right to convert Series 17 Preferred Shares into Series 18 Preferred Shares will be sent to the registered holders of the Series 17 Preferred Shares in accordance with the share conditions of the Series 17 Preferred Shares. Holders of Series 17 Preferred Shares are not required to elect to convert all or any part of their Series 17 Preferred Shares into Series 18 Preferred Shares. Holders who do not exercise their right to convert their Series 17 Preferred Shares into Series 18 Preferred Shares on such date will retain their Series 17 Preferred Shares, unless automatically converted in accordance with the conditions below.

The foregoing conversion right is subject to the conditions that: (i) if, after December 4, 2019, Manulife determines that there would be less than 1,000,000 Series 17 Preferred Shares outstanding on December 19, 2019, then all remaining Series 17 Preferred Shares will automatically be converted into an equal number of Series 18 Preferred Shares on December 19, 2019, and (ii) alternatively, if, after December 4, 2019, Manulife determines that there would be less than 1,000,000 Series 18 Preferred Shares outstanding on December 19, 2019, then no Series 17 Preferred Shares will be converted into Series 18 Preferred Shares. In either case, Manulife will give written notice to that effect to any registered holders of Series 17 Preferred Shares affected by the preceding minimums on or before December 11, 2019.

The dividend rate applicable to the Series 17 Preferred Shares for the 5-year period commencing on December 20, 2019, and ending on December 19, 2024, and the dividend rate applicable to the Series 18 Preferred Shares for the 3-month period commencing on December 20, 2019, and ending on March 19, 2020, will be determined and announced by way of a news release on November 20, 2019. Manulife will also give written notice of these dividend rates to the registered holders of Series 17 Preferred Shares.

Beneficial owners of Series 17 Preferred Shares who wish to exercise their right of conversion should instruct their broker or other nominee to exercise such right before 5:00 p.m. (Toronto time) on December 4, 2019. Conversion inquiries should be directed to Manulife’s Registrar and Transfer Agent, AST Trust Company (Canada), at 1-800-783-9495.

Subject to certain conditions described in the Prospectus, Manulife may redeem the Series 17 Preferred Shares, in whole or in part, on December 19, 2024 and on December 19 every five years thereafter and may redeem the Series 18 Preferred Shares, in whole or in part, after December 19, 2019.

The Toronto Stock Exchange (“TSX”) has conditionally approved the listing of the Series 18 Preferred Shares effective upon conversion. Listing of the Series 18 Preferred Shares is subject to Manulife fulfilling all the listing requirements of the TSX and, upon approval, the Series 18 Preferred Shares will be listed on the TSX under the trading symbol “MFC.PR.S”.

MFC.PR.M is a FixedReset, 3.90%+236, that commenced trading 2014-8-15 after being announced 2014-8-11. It is tracked by HIMIPref™ and has been assigned to the FixedReset (Insurance non-NVCC) subindex, but will move shortly to the FixedReset (Discount) subindex as the imposition of NVCC rules for insurers can no longer be considered probable.

I will have more to say one the reset rate has been determined November 20.

Manulife Financial Corporation has announced (on November 8):

that it does not intend to exercise its right to redeem all or any of its currently outstanding 14,000,000 Non-cumulative Rate Reset Class 1 Shares Series 17 (the “Series 17 Preferred Shares”) (TSX: MFC.PR.M) on December 19, 2019. As a result, subject to certain conditions described in the prospectus supplement dated August 11, 2014 relating to the issuance of the Series 17 Preferred Shares (the “Prospectus”), the holders of the Series 17 Preferred Shares have the right, at their option, to convert all or part of their Series 17 Preferred Shares on a one-for-one basis into Non-cumulative Floating Rate Class 1 Shares Series 18 of Manulife (the “Series 18 Preferred Shares”) on December 19, 2019. A formal notice of the right to convert Series 17 Preferred Shares into Series 18 Preferred Shares will be sent to the registered holders of the Series 17 Preferred Shares in accordance with the share conditions of the Series 17 Preferred Shares. Holders of Series 17 Preferred Shares are not required to elect to convert all or any part of their Series 17 Preferred Shares into Series 18 Preferred Shares. Holders who do not exercise their right to convert their Series 17 Preferred Shares into Series 18 Preferred Shares on such date will retain their Series 17 Preferred Shares, unless automatically converted in accordance with the conditions below.

The foregoing conversion right is subject to the conditions that: (i) if, after December 4, 2019, Manulife determines that there would be less than 1,000,000 Series 17 Preferred Shares outstanding on December 19, 2019, then all remaining Series 17 Preferred Shares will automatically be converted into an equal number of Series 18 Preferred Shares on December 19, 2019, and (ii) alternatively, if, after December 4, 2019, Manulife determines that there would be less than 1,000,000 Series 18 Preferred Shares outstanding on December 19, 2019, then no Series 17 Preferred Shares will be converted into Series 18 Preferred Shares. In either case, Manulife will give written notice to that effect to any registered holders of Series 17 Preferred Shares affected by the preceding minimums on or before December 11, 2019.

The dividend rate applicable to the Series 17 Preferred Shares for the 5-year period commencing on December 20, 2019, and ending on December 19, 2024, and the dividend rate applicable to the Series 18 Preferred Shares for the 3-month period commencing on December 20, 2019, and ending on March 19, 2020, will be determined and announced by way of a news release on November 20, 2019. Manulife will also give written notice of these dividend rates to the registered holders of Series 17 Preferred Shares.

Beneficial owners of Series 17 Preferred Shares who wish to exercise their right of conversion should instruct their broker or other nominee to exercise such right before 5:00 p.m. (Toronto time) on December 4, 2019. Conversion inquiries should be directed to Manulife’s Registrar and Transfer Agent, AST Trust Company (Canada), at 1-800-783-9495.

Subject to certain conditions described in the Prospectus, Manulife may redeem the Series 17 Preferred Shares, in whole or in part, on December 19, 2024 and on December 19 every five years thereafter and may redeem the Series 18 Preferred Shares, in whole or in part, after December 19, 2019.

The Toronto Stock Exchange (“TSX”) has conditionally approved the listing of the Series 18 Preferred Shares effective upon conversion. Listing of the Series 18 Preferred Shares is subject to Manulife fulfilling all the listing requirements of the TSX and, upon approval, the Series 18 Preferred Shares will be listed on the TSX under the trading symbol “MFC.PR.S”.

MFC.PR.M is a FixedReset, 3.90%+236, that commenced trading 2014-8-15 after being announced 2014-8-11. It is tracked by HIMIPref™ and has been assigned to the FixedReset (Insurance non-NVCC) subindex, but will move shortly to the FixedReset (Discount) subindex as the imposition of NVCC rules for insurers can no longer be considered probable.

I will have more to say one the reset rate has been determined November 20.

Atlantic Power Corporation and Atlantic Power Preferred Equity Ltd. have announced (on November 14):

that, in accordance with Preferred Equity’s Articles of Incorporation, as amended, the dividend rate on Preferred Equity’s outstanding Cumulative Rate Reset Preferred Shares, Series 2 (the “Series 2 Shares”), will be reset on December 31, 2019.

The new dividend rate for Series 2 Shares will be calculated on November 29, 2019, using a fixed dividend rate (the “Fixed Dividend Rate”), which will equal the sum of the Canadian Government five-year bond yield as of that date plus 4.18%.

Such Fixed Dividend Rate will commence with the March 31, 2020 dividend payment to the holders of the Series 2 Shares and continue through the December 31, 2024 dividend payment to the holders of the Series 2 Shares, at which time such Fixed Dividend Rate will again be reset.

The dividend rate for the Cumulative Floating Rate Preferred Shares, Series 3 (the “Series 3 Shares”) will be calculated on November 29, 2019 and will equal the sum of the Canadian Government 90-day Treasury Bill yield (using the three-month average results) plus 4.18%. Such dividend rate will be effective with the March 31, 2020 dividend payment to the holders of the Series 3 Shares. The Series 3 Shares dividend rate is reset each quarter.

On December 31, 2019 and again on December 31 of every fifth year thereafter, the holders of Series 2 Shares have the right to convert their Series 2 Shares, on a one-for-one basis, into Series 3 Shares and the holders of Series 3 Shares have the right to convert their Series 3 Shares, on a one-for-one basis, into Series 2 Shares.

Holders of Series 2 Shares or Series 3 Shares who wish to convert such securities to Series 3 Shares or Series 2 Shares, respectively, should contact the financial institution, broker or other intermediary through which they hold the Series 2 Shares or Series 3 Shares to exercise this conversion privilege. Notice of the exercise of the conversion privilege (an “Election Notice”) must be received by Preferred Equity not earlier than December 1, 2019 and not later than 5:00 p.m. (Toronto time) on December 16, 2019.

Automatic Conversion and Restrictions on Conversion

Series 2 Shares

If, after giving effect to all Election Notices, there would remain outstanding less than 1 million Series 2 Shares, then all remaining outstanding Series 2 Shares will automatically convert into Series 3 Shares, on a one-for-one basis on December 31, 2019. Holders of the Series 2 Shares will not be permitted to convert their Series 2 Shares into Series 3 Shares if, after giving effect to all Election Notices, there would be outstanding less than 1 million Series 3 Shares.

Series 3 Shares

If, after giving effect to all Election Notices, there would remain outstanding less than 1 million Series 3 Shares, then all remaining outstanding Series 3 Shares will automatically convert into Series 2 Shares, on a one-for-one basis on December 31, 2019. Holders of the Series 3 Shares will not be permitted to convert their Series 3 Shares into Series 2 Shares if, after giving effect to all Election Notices, there would be outstanding less than 1 million Series 2 Shares.

Inquiries should be directed to Preferred Equity’s registrar and transfer agent, Computershare Investor Services Inc., at 1-800-564-6253.

AZP.PR.B used to be CZP.PR.B, which used to be EPP.PR.B, and throughout these changes was a FixedReset, 7.00%+418, which commenced trading 2009-11-2 after being announced 2009-10-13. You can’t tell your players without a programme! Notice of extension was provided in November, 2014, and it reset to 5.57% effective 2014-12-31. I recommended in favour of conversion and the conversion rate was 42%.

AZP.PR.C resulted from the partial conversion of AZP.PR.B and commenced trading 2014-12-31.

I will have more to say once the reset dividend rate is known.

Bank of Montreal has announced (on November 14):

that none of its 12 million Non-Cumulative 5-Year Rate Reset Class B Preferred Shares, Series 31 (the “Preferred Shares Series 31”) will be converted on November 25, 2019 into Non-Cumulative Floating Rate Class B Preferred Shares, Series 32 of the Bank (the “Preferred Shares Series 32”).

During the conversion period which ran from October 28, 2019 to November 12, 2019, 69,570 Preferred Shares Series 31 were tendered for conversion into Preferred Shares Series 32, which is less than the minimum 1,000,000 required to give effect to the conversion, as described in the Preferred Shares Series 31 prospectus supplement dated July 23, 2014. As a result, no Preferred Shares Series 32 will be issued on November 25, 2019 and holders of Preferred Shares Series 31 will retain their shares.

The Preferred Shares Series 31 are currently listed on the Toronto Stock Exchange under the symbol BMO.PR.W. As previously announced on October 28, 2019, the dividend rate for the five-year period commencing on November 25, 2019, and ending on November 24, 2024, will be 3.851%.

BMO.PR.W is a FixedReset, 3.80%+222, that commenced trading 2014-7-30 after being announced 2014-7-22. Notice of extension was given 2019-9-27. BMO.PR.W will reset at 3.851% effective November 25, 2019. I recommended against conversion. It is tracked by HIMIPref™ and has been assigned to the FixedReset – Discount subindex.

Enbridge Inc. has announced (on November 18):

that none of its outstanding Cumulative Redeemable Preference Shares, Series 9 (Series 9 Shares) will be converted into Cumulative Redeemable Preference Shares, Series 10 of Enbridge (Series 10 Shares) on December 1, 2019.

After taking into account all conversion notices received from holders of its outstanding Series 9 Shares by the November 18, 2019 deadline for the conversion of the Series 9 Shares into Series 10 Shares, less than the 1,000,000 Series 9 Shares required to give effect to conversions into Series 10 Shares were tendered for conversion.

ENB.PF.A is a FixedReset, 4.40%+266, that commenced trading 2014-3-13 after being announced 2014-3-4. It reset to 4.097% effective 2019-12-1. The issue is tracked by HIMIPref™ but is relegated to the Scraps – FixedReset (Discount) subindex on credit concerns.