ATCO Ltd. has announced:
it will redeem on March 23, 2010 all of its outstanding 5.75% Cumulative Redeemable Preferred Shares, Series 3 at a price of $25.586644 (representing the $25.00 designated capital of each share and a prescribed premium of $0.50 per share plus $0.086644 of accrued and unpaid dividends per share). The total cost of this redemption is $153.5 million.
Shares TSX Stock Redemption Price Shares Outstanding Symbol Per Share ($) 5.75% Series 3 6,000,000 ACO.PR.A 25.586644
These dividends are eligible dividends for Canadian income tax purposes.
A formal notice and instructions for the redemption of the Series 3 Preferred Shares will be sent to preferred shareholders in accordance with the conditions attached to the Series 3 Preferred Shares.
ACO.PR.A closed last night at 26.20-38, so the risks of holding issues with negative yields-to-worst are illustrated yet again! Of course, one reason they are priced so high appears to be buying by CPD and other indexers in response to the issue’s addition to TXPR in the January rebalancing.
ACO.PR.A was last mentioned on PrefBlog in connection with the calculation of yield-to-issuer-best. It is tracked by HIMIPref™ and is a constituent of the Operating Retractible subindex.
Update: I have uploaded a Chart of the ACO.PR.A / CM.PR.A bid prices from 2009-12-31 to 2010-2-17 (CM.PR.A is the best comparator I can find, although not a very good one). There is a clear bump in the price of ACO.PR.A in the period in which it may be assumed CPD was buying. See the post POW.PR.C: Yes, CPD is the Buyer for another example.
Update, 2010-3-16: S&P announcement of removal from TXPR.