Lawrence Asset Management has announced:
that 680,998 HI PREFS Series 1 Shares (TSX: HPF.PR.A) and 207,662 HI PREFS Series 2 Shares (TSX: HPF.PR.B) were submitted for the annual redemption on June 30, 2008. Subsequent to the annual redemption there are 410,956 Series 1 Shares issued and outstanding and 800,792 Series 2 Shares issued and outstanding.
The redemption proceeds will be paid to Series 1 and Series 2 shareholders who participated in the annual redemption on or before July 15, 2008. Series 1 shareholders will receive redemption proceeds of $25.00 per Series 1 Share submitted for redemption and Series 2 shareholders will receive redemption proceeds of $11.11 per Series 2 Share submitted for redemption.
This is very curious. The prospectus states:
The Series 1 Shares, Series 2 Shares and Equity Shares are offered separately, but will be issued only on the basis that there will be an equal number of Series 1 Shares, Series 2 Shares and Equity Shares issued.
… but note the word “issued”. The section titled “Redemption” is more forthcoming:
In the event that any Series 1 Shares, Series 2 Shares or Equity Shares are tendered for redemption on a Redemption Date, the Company will purchase in the market for cancellation Series 1 Shares, Series 2 Shares and/or Equity Shares, as applicable, (or if the Equity Shares are not traded on a public market, redeem Equity Shares at an amount per share equal to the greater of the Net Asset Value per Equity Share and $3.54) in order that, to the extent practicable, the ratio of outstanding securities of each class remains constant.
… but note the phrase “to the extent practicable”.
Want to figure this one out? Why not try listening to the conference call previously mocked on PrefBlog?
Their fund page states:
On June 30, 2008, HI PREFS has its annual redemption feature. To listen to the replay of a conference call hosted by the Manager discussing the upcoming redemption please call 416-695-5800 / 1-800-408-3053, passcode 3262786.
Calling either number provided and tapping in the passcode results in a message that the passcode is invalid.
I’ve asked it before … I’ll ask it again: Is there anything about this issue that is not wierd?
Thank heavens that HPF.PR.A is finally out of the HIMIPref™ index. I never liked it … it was there only because volume was sufficient and DBRS insists it’s still investment grade despite the dividend default. With roughly two-thirds of the issue now having retracted, I can only hope that it continues to be eliminated from consideration due to volume concerns.
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