Great-West has an issuer bid outstanding for
| GWO Issuer Bid (Prefs) | ||
| Ticker | Outstanding | Bid for |
| GWO.PR.E | 7,978,900 | 790,000 |
| GWO.PR.X | 22,282,215 | 2,000,000 |
These are both retractible and, as stated in their 2005 Annual Report:
The adoption of the amendments to the CICA Handbook section on Financial Instruments – Disclosure and Presentation … resulted in the reclassification of the Series D, 4.70% Non-Cumulative First Preferred Shares [GWO.PR.E, jh] and the Series E, 4.80% Non-Cumulative First Preferred Shares to liabilities.
So, they’re being bought back because they’re bond-like for balance sheet purposes. Unlike many Issuer Bids, this one actually has some meaning: 368,200 of the GWO.PR.X disappeared from the balance sheet from 2004 to 2005, as did 21,100 of the GWO.PR.E.
Not the biggest news to roil the markets, but it’s interesting.
Update & Bump : In their third quarter, 2006, financials, Great-West stated:
During the nine months ended September 30, 2006, 1,077,700 Series E 4.80% Non-Cumulative First Preferred Shares [GWO.PR.X … JH] were purchased pursuant to the Company’s Normal Course Issuer Bid for a total cost of $30 [million … JH] or an average of $27.37 per share. The price in excess of stated value was charged to income.
[…] I’m not such a big fan of this one … pre-tax bid-YTW of 2.57% based on a bid of $27.55 and a call 2009-10-30 at $26.00. Given the issuer bid, it doesn’t seem likely to me that it will survive to its softMaturity 2013-9-29 to yield 3.20% (especially considering that one can buy GWL bonds maturiting in 2018 to yield about 4.75% – do the math, people!) … but it takes two to make a market! […]
[…] Update : I forgot the links to aid navigation! The issuer bid was last discussed January 25; it remains to be seen how the cash required for the Putnam Purchase will affect the buyback. […]