I have added Income & Growth Split Trust Preferred Sec to the HIMIPref™ database for a number of reasons, mainly the probability that several other preferred securities I track will be converted into this security next week (FCI.PR.A, FCF.PR.A, FCN.PR.A).
I can’t say I’m a big fan of this issue. It has had a continuous call at par effective since issue date, which is annoying. I have long been an advocate of a declining call premium on split share preferreds, so that preferred holders have at least a sporting chance of a capital gain and can plan their portfolios with a bit more confidence.
According to their annual report, the fund had no redemptions in 2005, but this situation has changed markedly in 2006. The third-quarter report discloses that of the 5,545,000 units outstanding Dec. 31, 2005, 2,375,599 (or 42.8%) had been redeemed. No wonder they got the urge to merge!
Assuming they get approval, the underlying investments won’t be solely Income Trusts any more – the Investment strategy will include:
Subject to the Investment Restrictions, the net proceeds of any Offering, together with any amounts drawn under the Loan Facility, will under normal market conditions be invested by the Trust in an actively managed diversified portfolio of securities, consisting of the following asset classes: (i) Income Fund Securities, (ii) Dividend-Paying North American Equities, (iii) Non-Investment Grade Debt; (iv) Short Term Investments; (v) Convertible Debt; and (vi) other income-generating securities.’’
Which doesn’t sound exactly 100% thrilling, but as long as there’s a hefty asset coverage ratio, the pref holders shouldn’t mind.
BNS.PR.L Gets a Solid Reception
Wednesday, January 24th, 2007BNS.PR.L commenced trading today, after having been announced January 8. Scotia announced today that the underwriters’ over-allotment privilege had been exercised to the tune of 1.8 million shares, bringing the total size of the issue to 13.8 million shares valued at $345-million.
The issue traded a healthy 387,831 shares in a range of 24.98-08. The closing quotation was 25.07-09, 67×50.
There may be a little more value left in this issue, as HIMIPref™ calculates a curvePrice of $25.26:
After-tax Curve
The securityCode for this issue is A41009, replacing the preIssue code of P75004. A reorgDataEntry has been created to reflect this change.
The issue has been added to the “PerpetualPremium” Index as of 1/24.
Posted in Data Changes, Index Construction / Reporting, Issue Comments | 5 Comments »