FTS.PR.K : Fortis Admits Error, Resets Reset to 3.929%

Fortis Inc. has announced:

Fortis has declared and hereby gives notice of a corrected second quarter dividend of $0.2455625 per share on its Cumulative Redeemable Fixed Rate Reset First Preference Shares, Series K (the “Series K Shares”), payable on June 1, 2019 to the shareholders of record of the Series K Shares at the close of business on May 17, 2019. This notice replaces and supersedes the dividend of $0.2453125 declared on the Series K Shares and disclosed in a news release dated February 14, 2019, which was the first dividend declared following the January 30, 2019 reset of the fixed dividend rate pursuant to the terms of the Series K Shares.

The dividend on the Series K Shares has been designated by the Corporation as an eligible dividend for federal and provincial dividend tax credit purposes.

This has been quite the saga! Fortis made selective disclosure of the reset rate which was eventually revealed to be 3.925%, which was inconsistent with others determined with identical timing. I recommended that holders not convert and there was no conversion. Fortis was recalcitrant in responding to inquiries but eventually admitted their error, while stating that public disclosure would occur in early April. This was later delayed until May 1 and now, finally, the issue can be put to bed.

Errors happen. Big deal. The real issue in this abominable display of incompetent arrogance is Fortis’ disgraceful communication practices. They really need to think about how well they communicate with their financiers.

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