Fortis Tight-Lipped Regarding Apparent FTS.PR.K Reset Rate Discrepancy

In the post FTS.PR.K : No Conversion to FloatingReset, I noted:

My eMail of inquiry – sent on three successive days – also included the question:
The 3.925% rate for FTS.PR.K implies that the five-year Canada rate, as defined in the prospectus, was 1.875%, whereas your competitors’ calculations implied that this rate was 1.879%. For greater certainty, please confirm the exact date and time for which you obtained the relevant rate from Bloomberg.

Fortis Investor Relations tells me they’ll be getting back to me.

This question was triggered by the earlier observation:

It is of interest to note that the Government of Canada 5-Year yield implied by this rate is 1.875%, whereas the rates of the resets for PPL.PR.C, ENB.PR.P and ENB.PR.J each imply a rate of 1.879%. As far as I can tell, the methodology for getting each of the four rates is identical and specified to be at the same time on the same day. Once Fortis has published the rate officially, I’ll ask them about it. I don’t think it’s just a rounding difference – from the prospectus:
“Annual Fixed Dividend Rate” means, for any Subsequent Fixed Rate Period, the rate of interest (expressed as a percentage rounded to the nearest one hundred-thousandth of one percent (with 0.000005% being rounded up)) equal to the sum of the Government of Canada Bond Yield on the applicable Fixed Rate Calculation Date plus 2.05%.

All of this followed their very unusual selective disclosure of the reset rate to their friends in the brokerage industry.

So on the afternoon of March 6, having heard nothing from them in a week, I sent the following eMail to Fortis Investor Relations:

Have you yet been able to obtain the requested information confirming the effective date and time of the Government of Canada Five Year rate information obtained from Bloomberg?


This was sent again as a possible duplicate in the afternoon of March 7.

The response received in the afternoon of March 8 is:

Thank you for following-up on your request. I will check with the Treasury department again regarding your question.

I will be back in touch when I have the information.

Further updates of this saga will provided.

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