Category: Issue Comments

DBRS has announced that it:

placed the credit ratings of Laurentian Bank of Canada (LBC or the Bank), including the Bank’s Long-Term Issuer Rating of BBB, Under Review with Positive Implications. This credit rating action follows the December 2, 2025, announcement that Fairstone Bank of Canada (Fairstone or the Group; rated BBB, Under Review with Positive Implications) has entered into a definitive agreement to acquire all of LBC’s issued and outstanding common shares, subject to approval by the Bank’s shareholders and receipt of required regulatory approvals. In parallel, National Bank of Canada (National, with a Long-Term Issuer Rating of AA with a Stable trend) has entered into a definitive agreement to acquire LBC’s retail and small and medium-size (SME) banking portfolios as well as its syndicated loan portfolio. LBC’s Long-Term Issuer Rating is composed of an Intrinsic Assessment (IA) of BBB and a Support Assessment (SA) of SA3, which reflects no expectation of timely systemic support. As a result, the Bank’s Long-Term Issuer Rating is equivalent to its IA.

KEY CREDIT RATING CONSIDERATIONS
The Under Review with Positive Implications designation reflects Morningstar DBRS’ expectation that LBC’s credit ratings would benefit from the potential upgrade of Fairstone’s credit ratings as a result of the acquisition-driven improvement in the Group’s consolidated credit profile. After the completion of the acquisition, the Bank’s SA designation of SA3 would change to SA1 and its long-term credit ratings will be driven by those of the Group.

Similarly, and as implied above, Fairstone is on Review-Positive:

DBRS Limited (Morningstar DBRS) placed Fairstone Bank of Canada’s (Fairstone or the Group) credit ratings, including the Group’s Long-Term Issuer Rating of BBB, Under Review with Positive Implications. As a result, Morningstar DBRS also placed its credit ratings on Home Trust Company (HTC), a fully owned subsidiary of Fairstone, Under Review with Positive Implications. These credit rating actions follow the December 2, 2025, announcement that Fairstone has entered into a definitive agreement to acquire all of Laurentian Bank of Canada’s (LBC) issued and outstanding common shares, subject to approval by LBC’s shareholders and receipt of required regulatory approvals. Concurrently, Morningstar DBRS changed HTC’s Support Assessment designation to SA1 from SA3 and withdrew its Intrinsic Assessment (IA) of BBB. Fairstone’s Long-Term Issuer Rating is composed of an IA of BBB and a Support Assessment of SA3, which reflects no expectation of timely systemic support. As a result, the Group’s Long-Term Issuer Rating is equivalent to its IA.

KEY CREDIT RATING CONSIDERATIONS
The Under Review with Positive Implications designation reflects Morningstar DBRS’ expectation that the potential acquisition would have a materially positive impact on the Group’s consolidated credit profile. This would likely result in a positive credit rating action: either an upgrade of Fairstone’s credit ratings or a Positive trend, to be resolved within approximately 12 months of deal closure, which is currently expected in late 2026, depending on integration progress.

DBRS also released its comments on the deal.

LB.PR.H was issued as a NVCC-compliant FixedReset, 4.30%+255, that commenced trading 2014-4-3 after being announced 2014-3-25. The extension was announced 2019-5-7. LB.PR.H reset At 4.123% effective June 15, 2019. I made no recommendation regarding conversion and there was no conversion. The issue was downgraded to Pfd-4(high) by DBRS in November, 2024.

Laurentian Bank of Canada has announced:

a significant acceleration of its 2024 Strategic Plan toward its specialty commercial bank model, resulting in its exit from the retail and SME banking business. This transformation will position Laurentian Bank as a commercially oriented bank, concentrating on commercial real estate lending, inventory and equipment financing, intermediary services and capital markets activities.

National Bank of Canada (directly or through one or more affiliates) (“National Bank”) has entered into a definitive agreement to acquire Laurentian Bank’s retail and SME banking portfolios (the “Retail/SME Transaction”). Customers will benefit from National Bank’s enhanced offering of retail and business banking solutions, including deposits, loans and investments. They will also be served through National Bank’s leading digital services, expanded product and service offerings, and a broader branch network and business banking teams. Laurentian Bank and National Bank have also entered into a definitive agreement in respect of the sale to National Bank of Laurentian Bank’s syndicated loan portfolio (the “Syndicated Loan Transaction” and, collectively with the Retail/SME Transaction, the “National Bank Transactions”).

In parallel, Fairstone Bank of Canada (“Fairstone Bank”), Canada’s leading alternative lender and a Schedule I bank, has entered into a definitive agreement (the “Acquisition Transaction Agreement”) to acquire all issued and outstanding common shares of Laurentian Bank (the “Laurentian Bank Shares”) (the “Acquisition Transaction” and, collectively with the Retail/SME Transaction, the “Transactions”). Fairstone Bank will combine its commercial lending operations with Laurentian Bank’s commercial specialization, leveraging the expertise of both organizations to strengthen capabilities and expand market presence. Laurentian Bank will retain its brand identity and head office in Montreal, continuing its legacy of over 175 years. Éric Provost will continue to serve as Laurentian Bank’s President and CEO, spearheading the accelerated execution of its strategic growth plan with a concentrated focus on commercial banking activities.
…
The Acquisition Transaction is subject to approval of 662/3% of the votes cast by Laurentian Bank Shareholders at a special meeting of Laurentian Bank Shareholders (the “Meeting”) expected to be held in the first quarter of 2026 to approve an amendment to Laurentian Bank’s by-laws to provide for the acquisition of the Laurentian Bank Shares pursuant to the terms of the Acquisition Transaction Agreement.
…
Following completion of the Transactions, it is expected that the Laurentian Bank Shares will be delisted from the TSX. However, Laurentian Bank’s Non-Cumulative Class A Preferred Shares, Series 13, Non-Cumulative 5-Year Fixed Rate Reset Class A Preferred Shares, Series 17, 5.30% Limited Recourse Capital Notes, Series 1 and 5.095% subordinated non-viability contingent capital notes are expected to remain outstanding in accordance with their terms following the completion of the Transactions. Laurentian Bank’s Non-Cumulative Class A Preferred Shares, Series 13 will continue to be listed on the TSX and, as a result, Laurentian Bank will continue to be a reporting issuer under applicable Canadian securities laws following completion of the Transactions.

LB.PR.H was issued as a NVCC-compliant FixedReset, 4.30%+255, that commenced trading 2014-4-3 after being announced 2014-3-25. The extension was announced 2019-5-7. LB.PR.H reset At 4.123% effective June 15, 2019. I made no recommendation regarding conversion and there was no conversion. The issue reset to 6.196% effective 2024-6-15.

Thanks to Assiduous Reader John19 for bringing this to my attention!

The acquisition won’t do much for the credit rating – Fairstone Bank of Canada has a Long Term Senior Debt rating of BBB from DBRS, the same as Laurentian.

Great-West Lifeco Inc. has announced:

the dividend rates for its Non-Cumulative 5-Year Rate Reset First Preferred Shares, Series N (“Series N Shares”) and Non-Cumulative Floating Rate First Preferred Shares, Series O (“Series O Shares”).

The annual fixed dividend rate for the five-year period starting on December 31, 2025 and ending on December 30, 2030 that will apply to any Series N Shares that remain outstanding on December 31, 2025 will be 4.090% per annum (or $0.255625 per Series N Share per quarter). The 4.090% annual rate is equal to the sum of the Government of Canada Yield (as defined in the Series N Share terms) on December 1, 2025 plus 1.30%.

The floating dividend rate for the period starting on December 31, 2025 and ending on March 30, 2026 that will apply to any Series O Shares issued on December 31, 2025 will be 3.518% per annum (or $0.216863 per Series O Share per quarter). The 3.518% annual rate is equal to the sum of the T-Bill Rate (as defined in the Series O Share terms) on December 1, 2025 plus 1.30%.

A news release announcing the conversion right for the Series N Shares was issued on November 13, 2025 and can be viewed on Lifeco’s website. Beneficial owners of Series N Shares who wish to convert their shares into Series O Shares should communicate as soon as possible with their broker or other nominee to ensure their instructions are followed, so that the registered holder of the Series N Shares can meet the deadline to exercise the conversion right, which is 5:00 p.m. (ET) on Tuesday, December 16, 2025.

GWO.PR.N was issued as a FixedReset, 3.65%+130, that commenced trading 2010-11-23 after being announced 2010-11-15. The issue was met with disfavour and there was an inventory clearance sale closing 2010-12-3. After a notice of extension the issue issue reset to 2.176% in 2015. I recommended against conversion; there was a 15% conversion to the FloatingReset GWO.PR.O anyway. The company provided another notice of extension in November, 2020. The issue reset to 1.749% effective 2020-12-31 and there was a forced conversion from GWO.PR.O to the FixedReset. A notice of extension was provided 2025-11-13. The issue is tracked by HIMIPref™ and is assigned to the FixedReset (Insurance) subindex.

Thanks to Assiduous Reader niagara for bringing this to my attention!

Capital Power Corporation has announced:

that it has notified registered shareholders of its Cumulative Rate Reset Preference Shares, Series 1 (the “Series 1 Shares”) (TSX: CPX.PR.A) of the conversion privilege and dividend rate applicable to the Series 1 Shares.

Subject to certain conditions, beginning on December 1, 2025 and ending at 5:00 p.m. (Toronto time) on December 16, 2025 (the “Election Period”), each registered holder of Series 1 Shares will have the right to elect to convert any or all of their Series 1 Shares into an equal number of Cumulative Floating Rate Preference Shares, Series 2 (the “Series 2 Shares”) by delivering a completed election notice (an “Election Notice”) to the Corporation.

If Capital Power does not receive an Election Notice from a holder of Series 1 Shares during the Election Period, then such holder will be deemed not to have exercised its right to convert (except in the case of an Automatic Conversion, as described below). Holders of the Series 1 Shares and the Series 2 Shares will have the opportunity to convert their shares again on December 31, 2030, and every five years thereafter as long as such shares remain outstanding.

On December 1, 2025, the annual fixed dividend rate for the Series 1 Shares was set for the next five-year period (from and including December 31, 2025, to but excluding December 31, 2030) at 4.95800% and the floating quarterly dividend rate for the Series 2 Shares was set for the first quarterly floating rate period (being the period from and including December 31, 2025, to but excluding March 31, 2026) at 1.08197%. The floating quarterly dividend rate for the Series 2 Shares will be reset every quarter.

The Series 1 Shares are issued in “book entry only” form and, as such, the sole registered holder of the Series 1 Shares is CDS Clearing and Depository Services Inc. (“CDS”). Accordingly, all rights of beneficial holders of Series 1 Shares must be exercised through CDS or the CDS participant through which the Series 1 Shares are held. The deadline for the registered shareholder to provide notice of exercise of the right to convert Series 1 Shares into Series 2 Shares is 3:00 p.m. (MT) / 5:00 p.m. (ET) on December 16, 2025. Election Notices received after this deadline will not be valid. Beneficial holders of Series 1 Shares who wish to exercise their rights to convert should contact their broker or other intermediary for more information well in advance of the deadline in order to provide the broker or intermediary with time to complete the necessary steps.

After December 16, 2025, (i) if Capital Power determines that fewer than 1,000,000 Series 1 Shares would remain outstanding on December 31, 2025, all remaining Series 1 Shares will be automatically converted into Series 2 Shares on a one-for-one basis effective December 31, 2025 (an “Automatic Conversion”); or (ii) if Capital Power determines that fewer than 1,000,000 Series 2 Shares would remain outstanding after December 31, 2025, no Series 1 Shares will be permitted to be converted into Series 2 Shares effective December 31, 2025. There are currently 5,000,000 Series 1 Shares outstanding.

The Toronto Stock Exchange (“TSX”) has conditionally approved the listing of the Series 2 Shares effective upon conversion. Listing of the Series 2 Shares is subject to Capital Power fulfilling all TSX listing requirements and, upon approval, the Series 2 Shares will be listed on the TSX under the trading symbol CPX.PR.B.

For more information on the terms of, rates and risks associated with an investment in, the Series 1 Shares and the Series 2 Shares, please see Capital Power’s Short Form Prospectus dated December 8, 2010 which is available electronically on the System for Electronic Data Analysis and Retrieval + (“SEDAR+”) at www.sedarplus.ca or on Capital Power’s website at capitalpower.com.

CPX.PR.A was issued as a FixedReset 4.60%+217 that commenced trading 2010-12-16 after being announced 2010-12-1. It reset to 3.06% effective 2015-12-31 and I recommended against conversion; there was no conversion to FloatingResets. It reset to 2.621% effective 2020-12-31 and there was no conversion. The issue is tracked by HIMIPref™ but is relegated to the Scraps – FixedReset (Discount) subindex on credit concerns.

Fairfax Financial Holdings Limited has announced:

its intention to redeem (i) all of its 10,420,101 outstanding Cumulative 5-Year Rate Reset Preferred Shares, Series I (the “Series I Shares”), and (ii) all of its 1,579,899 outstanding Cumulative Floating Rate Preferred Shares, Series J (the “Series J Shares” and, together with the Series I Shares, the “Preferred Shares”) on December 31, 2025 (the “Redemption Date”) at a redemption price equal to C$25.00 per share, for an aggregate total amount of C$300.0 million, together with all accrued and unpaid dividends up to but excluding the Redemption Date (the “Redemption Price”), less any tax required to be deducted and withheld by Fairfax.

Formal notice has been delivered to the sole registered holder of the Preferred Shares in accordance with the terms of the Preferred Shares of the applicable series as set out in Fairfax’s articles.

Separately from the Redemption Price, (i) the final quarterly dividend of C$0.207938 per Series I Share will be paid in the usual manner to holders of Series I Shares on December 31, 2025, and (ii) the final quarterly dividend of C$0.34727 per Series J Share will be paid in the usual manner to holders of Series J Shares on December 30, 2025, in each case to shareholders of record on December 15, 2025.

Non-registered holders of Preferred Shares should contact their broker or other intermediary for information regarding the redemption process for the series of Preferred Shares in which they hold a beneficial interest. Fairfax’s transfer agent for the Preferred Shares is Computershare Trust Company of Canada (“Computershare”). Questions regarding the redemption process may be directed to Computershare at 1-800-564-6253 or by email to corporateactions@computershare.com.

Following the redemption on December 31, 2025, the Series I Shares and the Series J Shares will be delisted from and no longer trade on the Toronto Stock Exchange (“TSX”).

Fairfax is a holding company which, through its subsidiaries, is primarily engaged in property and casualty insurance and reinsurance and the associated investment management.

FFH.PR.I was issued as a FixedReset, 5.00%+285, that commenced trading 2010-10-5 after being announced 2010-9-27. The issue reset at 3.708% in 2015 and I recommended against conversion. In 2020, the issue reset to 3.327%.

FFH.PR.J is a FloatingReset, Bills+285, that came into existence in 2015 via partial conversion from FFH.PR.I.

Canadian Utilities Limited has announced:

it has closed its previously announced public offering of Cumulative Redeemable Second Preferred Shares Series JJ, by a syndicate of underwriters co-led by BMO Capital Markets and RBC Capital Markets, and including TD Securities Inc., Scotiabank, CIBC Capital Markets, National Bank Financial Inc., and ATB Capital Markets (the “Underwriters”). Canadian Utilities issued 8,050,000 Series JJ Preferred Shares for gross proceeds of $201,250,000, which includes the full exercise of the Underwriters’ over-allotment option. The Series JJ Preferred Shares will begin trading on the Toronto Stock Exchange (the “TSX”) today under the symbol CU.PR.K. Proceeds from the issue will be used for capital expenditures and for other general corporate purposes.

CU.PR.K is a Straight Perpetual, 5.60%, announced 2025-11-12. It has been assigned to the PerpetualDiscounts subindex.

The issue traded 487,376 shares today in a range of 24.88-00 before closing at 24.96-00. Vital statistics are:

Brookfield Corporation has announced:

the completion of its previously announced Class A Preference Shares, Series 54 (“Preferred Shares, Series 54”) issue in the amount of C$250,000,000 (the “Offering”). The Offering was underwritten on a bought deal basis by a syndicate of underwriters (the “Underwriters”) led by Scotiabank, BMO Capital Markets, CIBC Capital Markets, National Bank Financial Inc., RBC Capital Markets and TD Securities Inc.

A total of 10,000,000 Preferred Shares, Series 54 were issued at a price of C$25.00 per share, for gross proceeds of C$250,000,000. The issuance included 2,000,000 Preferred Shares, Series 54 issued pursuant to the exercise, in full, of the Underwriters’ option granted by Brookfield to the Underwriters in the Offering. Holders of the Preferred Shares, Series 54 will be entitled to receive a cumulative quarterly fixed dividend yielding 5.65% annually for the initial period ending December 31, 2030. Thereafter, the dividend rate will be reset every five years at a rate equal to the greater of: (i) the 5-year Government of Canada bond yield plus 2.80%, and (ii) 5.65%. The Preferred Shares, Series 54 will commence trading on the Toronto Stock Exchange this morning under the ticker symbol BN.PF.M. The Preferred Shares, Series 54 may not be offered or sold in the United States or to U.S. persons absent registration or an applicable exemption from the registration requirements under the U.S. Securities Act.

Brookfield intends to use the net proceeds from the Offering to redeem all of its outstanding Cumulative Class A Preference Shares, Series 44 (“Preferred Shares, Series 44”) (TSX: BN.PF.H) for cash on December 31, 2025. The redemption price for each share will be C$25.00. Holders of Preferred Shares, Series 44 of record as of December 15, 2025 will receive the previously declared quarterly dividend of C$0.3125 per share, payable on December 31, 2025.

BN.PF.M is a FixedReset, 5.65%+280M565, announced 2025-11-19.

The redemption of BN.PF.H is discussed elsewhere.

The issue traded 819,110 shares today in a range of 25.05-45 before closing at 25.30-34. Vital statistics are:

Thanks to Assiduous Reader Brian for bringing this to my attention!

Great-West Lifeco Inc. has announced (on 2025-11-13):

that it does not intend to exercise its rights to redeem its outstanding Non-Cumulative 5-Year Rate Reset First Preferred Shares, Series N (“Series N Shares”) on December 31, 2025. As a result and subject to certain conditions, holders of Series N Shares have the right to convert all or any of their Series N Shares into Non-Cumulative Floating Rate First Preferred Shares, Series O (“Series O Shares”) on a one-for-one basis on December 31, 2025.

Lifeco will send a formal notice of this conversion right to the registered holder of the Series N Shares in accordance with the terms and conditions attached to the shares. Holders of Series N Shares who do not exercise their conversion right will retain their Series N Shares.

The conversion right is subject to the following conditions: (i) if Lifeco determines that, after having taken into account all shares tendered for conversion, there would be less than one million Series O Shares outstanding on December 31, 2025, no Series N Shares may be converted into Series O Shares; and (ii) alternatively, if Lifeco determines that, after having taken into account all shares tendered for conversion, there would be less than one million Series N Shares outstanding on December 31, 2025, then all remaining Series N Shares will automatically be converted into Series O Shares on a one-for-one basis on December 31, 2025. In either case, Lifeco will give written notice to that effect to any registered holder affected by the preceding conditions on or before Wednesday, December 24, 2025.

The dividend rate applicable to the Series N Shares for the five-year period commencing on December 31, 2025 and ending on December 30, 2030, and the dividend rate applicable to the Series O Shares for the three-month period commencing on December 31, 2025 and ending on March 30, 2026, will be determined on Monday, December 1, 2025 and written notice of these rates will be given to the registered holder of the Series N Shares on that day.

Beneficial owners of Series N Shares who wish to convert their shares into Series O Shares should communicate as soon as possible with their broker or other nominee to ensure their instructions are followed, so that the registered holder of the Series N Shares can meet the deadline to exercise the conversion right, which is 5:00 p.m. (ET) on Tuesday, December 16, 2025.

Lifeco may redeem the Series N Shares, in whole or in part, on December 31, 2030 and on December 31 every five years thereafter for $25.00 per share plus declared and unpaid dividends. Lifeco may redeem the Series O Shares, in whole or in part, on any date for $25.50 per share plus declared and unpaid dividends, unless such Series O Shares are redeemed on December 31, 2030 or on December 31 every five years thereafter, in which case the redemption price will be $25.00 per share plus declared and unpaid dividends.

GWO.PR.N was issued as a FixedReset, 3.65%+130, that commenced trading 2010-11-23 after being announced 2010-11-15. The issue was met with disfavour and there was an inventory clearance sale closing 2010-12-3. After a notice of extension the issue issue reset to 2.176% in 2015. I recommended against conversion; there was a 15% conversion to the FloatingReset GWO.PR.O anyway. The company provided another notice of extension in November, 2020. The issue reset to 1.749% effective 2020-12-31 and there was a forced conversion from GWO.PR.O to the FixedReset. The issue is tracked by HIMIPref™ and is assigned to the FixedReset (Insurance) subindex.

Power Corporation has announced:

the closing of its offering of 8,000,000 5.65% Non-Cumulative First Preferred Shares, Series I in the capital of the Corporation (the “Series I Shares”) priced at $25.00 per share for gross proceeds of $200 million. The issue was bought by a syndicate of underwriters led by BMO Capital Markets, RBC Capital Markets and Scotiabank.

The Series I shares will be listed and posted for trading on the Toronto Stock Exchange under the symbol “POW.PR.I”. The net proceeds of this offering will be used by Power Corporation for general corporate purposes.

POW.PR.I is a 5.65% Straight Perpetual announced 2025-11-13. It has been added to the PerpetualDiscount sub-index.

The issue traded 361,500 shares today in a range of 24.85-95 before closing at 24.87-88. Vital statistics are: