Category: Issue Comments

National Bank of Canada has announced:

its intention to redeem all of its remaining issued and outstanding Non-Cumulative 5-Year Rate Reset First Preferred Shares Series 28 (the “Preferred Shares Series 28”) on November 15, 2017 (the “Redemption Date”).

Pursuant to the share conditions, on the Redemption Date, the Bank may, at its option, redeem the Preferred Shares Series 28 at a price equal to $25.00 per share together with all declared and unpaid dividends. The declared dividends payable on November 15, 2017 will be paid to shareholders of record on October 10, 2017.

Formal notice will be issued to shareholders in accordance with the share conditions. The redemption of the Preferred Shares Series 28 is subject to the approval of the Office of the Superintendent of Financial Institutions and is part of the Bank’s ongoing management of its regulatory capital.

The Bank recommends shareholders consult with their tax advisors to determine the appropriate treatment and impact of the redemption.

NA.PR.Q is a FixedReset, 3.80%+243, that commenced trading 2012-11-7 after being announced 2012-10-30. It has been tracked by HIMIPref™ and assigned to the FixedReset subindex.

Standard & Poor’s has announced:

• •We are revising our outlook on Brookfield Renewable Partners L.P. (BEP) to negative from stable, reflecting limited cushion in the credit metrics should the recovery we are expecting in hydrology and generation across BEP’s footprint fail to materialize.
• •We believe droughts, El Nino, and low hydrology have affected BEP’s portfolio over the past couple of years, resulting in generation below long-term averages (LTA) that is offsetting the portfolio’s geographic diversity.
• •We are affirming our ratings on BEP, including our ‘BBB+’ long-term corporate credit rating.

…
The outlook revision reflects what we view as limited cushion in the credit metrics should the recovery we are expecting to see in hydrology and generation across BEP’s footprint fail to materialize. Metrics have been lower in the past two years because of lower distributions received from owned assets. During this period, generation has been lower than long-term averages mainly due to low hydrology in North America and Brazil, and drought in Colombia due to the El Nino effect in first-half 2016. Even though minimal, the appreciation of the U.S. dollar during this time has also not helped.

The negative outlook reflects S&P Global Ratings’ view that there is limited cushion in the credit metrics should the recovery expected in hydrology and generation across BEP’s footprint fail to materialize. We still expect BEP to maintain a well-diversified portfolio of generation assets, operate under long-term contracts with investment-grade counterparties, and generate fairly predictable cash flows to support its holding-company debt obligations. We expect base-case FFO-to-debt in the 20%-25% range and debt-to-EBITDA of 3.5x-4.5x during our two-year outlook period. We also expect BEP to remain moderately strategic to parent BAM as per our group rating assessment.

We could lower the rating if FFO-to-debt consistently falls below 23% or if the QD score deteriorates during the outlook period. This could result distributions lower than currently forecast as a result of generation below LTA or from acquisitions or capital expenditures financed with substantially higher levels of holding-company debt or acquisition of higher risk merchant assets or a material change in the contractual profile of the operating assets. Given the group support, a negative rating action on the parent would flow through to BEP. In addition, a revision in our assessment of the group status to nonstrategic could result in a downgrade, though this appears less likely.

We could revise the outlook back to stable if the company maintains forward-looking credit metrics at the higher end of the significant. This could result from lower resource variability, generation in line with LTA, increased cash flow, significant deleveraging, and acquisitions financed with lower levels of holding-company debt, all resulting in FFO-to-debt of 25%-30% and debt-to-EBITDA of 3.0x-3.5x.

Affected issues are:

BRF.PR.A, BRF.PR.B, BRF.PR.C, BRF.PR.E and BRF.PR.F (These are from Brookfield Renewable Power Preferred Equity Inc., a wholly owned subsidiary of BEP, and pay eligible dividends)

BEP.PR.E, BEP.PR.G, BEP.PR.I and BEP.PR.K (These are from Brookfield Renewable Partners L.P. itself, and pay distributions comprised of return of capital and ordinary income)

It is not too long since S&P upgraded BEP & BRF to P-2(low) (which was affirmed).

Quadravest has announced:

North American Financial 15 Split Corp. (the “Company”) is pleased to announce the Preferred Share dividend rate for the fiscal year beginning December 1, 2017. Monthly payments to FFN.PR.A will be $0.04583 per share for an annual yield of 5.50% on their $10 redemption value. This is an increase of one quarter of one percent over the current rate.

The Company invests in an actively managed, high quality portfolio consisting of 15 financial services companies made up of Canadian and U.S. issuers as follows:

Bank of Montreal	National Bank of Canada	Bank of America Corp.
The Bank of Nova Scotia	Manulife Financial Corporation	Citigroup Inc.
Canadian Imperial Bank of Commerce	Sun Life Financial Services of Canada Inc.	Goldman Sachs Group Inc.
Royal Bank of Canada	Great-West Lifeco Inc.	JP Morgan Chase & Co.
The Toronto-Dominion Bank	CI Financial Corp.	Wells Fargo & Co.

This is a rather peculiar action for them to take, particularly given that the liquidation date for the company is 2019-12-1 (which the company may extend at will, but only while giving retraction rights to shareholders). I believe we are now in the position of waiting for the other shoe to drop!

Brompton Group has announced:

Brompton Split Banc Corp. (the “Fund”) announces that the distribution rate for the Preferred Shares for the 5 year term from December 1, 2017 to November 29, 2022 will be $0.50 per annum (5.0% on the original issue price of $10) payable quarterly. The Preferred Share distribution rate is based on current market rates for preferred shares with similar terms. In addition, the Fund intends to maintain the targeted monthly Class A Share distribution rate at $0.10 per Class A Share. The Fund previously announced the extension of the term of the Class A Shares and the Preferred Shares from November 29, 2017 to November 29, 2022. The term extension offers Preferred shareholders the opportunity to enjoy preferential cash dividends until November 29, 2022. Since inception in November 2005 to August 31, 2017, the Preferred share has delivered an attractive 5.1%(1) per annum return.

Since inception and over the 1, 3, 5 and 10 year periods to August 31, 2017, the Class A share has significantly outperformed both the S&P/TSX Capped Financials Index and the S&P/TSX Composite Index as shown in the table below.

Annual Compound Returns	1-Year	3-Year	5-Year	10-Year	Since Inception
Brompton Split Banc Corp. – Class A	20.5%	7.9%	19.3%	10.3%	11.1%
S&P/TSX Capped Financials Index	15.8%	7.1%	14.2%	7.0%	8.1%
S&P/TSX Composite Index	7.2%	2.1%	8.1%	4.1%	6.1%

Since inception to August 31, 2017, Class A shareholders have also received cash distributions of $13.65 per share. Class A shareholders have the option to benefit by reinvesting their cash distributions in a distribution reinvestment plan (“DRIP”) which is commission free to participants. Class A shareholders can enroll in the DRIP program by contacting their investment advisor.

Brompton Split Banc Corp. invests in a portfolio, on an approximately equal weight basis, in common shares of six Canadian Banks: Bank of Montreal, Canadian Imperial Bank of Commerce, National Bank of Canada, Royal Bank of Canada, The Bank of Nova Scotia and The Toronto-Dominion Bank.

In connection with the extension, shareholders who do not wish to continue their investment in the Fund, may retract their Preferred Shares or Class A Shares on November 29, 2017 pursuant to a special retraction right and receive a retraction price that is calculated in the same way that such price would be calculated if the Fund were to terminate on November 29, 2017. Pursuant to this option, the retraction price may be less than the market price if the security is trading at a premium to net asset value. Notice must be provided to your investment dealer by October 31, 2017 at 5:00 p.m. (Toronto time) in order to exercise this right; however, investment dealers may have earlier deadlines.

Well, sure the Capital Units have outperformed their indices over the last ten years. The market’s gone up substantially – if a leveraged investment hasn’t outperformed, then that would be a problem! A better – although by no means ‘good’ – indicator is the performance of the Whole Units against the index, and it is very pleasant to learn that as of the Fund’s 2016 Year-End, the Whole Units also outperformed the cited indices, although by much more modest amounts. That’s still not the greatest comparison, however, since the indices are the Composite – including everything – and the Capped Financial index, which includes insurance companies as the biggest non-bank chunk. Brompton Lifeco Split Corp. has not done quite as well!

However, I must emphasize that I am saying this only in reaction to the excessive bragging about performance in the press release. SBC & SBC.PR.A are fine products and the latter is frequently among the recommendations in my monthly newsletter. It does what it’s supposed to do and it does it cheaper than most, as disclosed in the 2016 Annual Report:

The MER per unit, excluding Preferred share distributions (which were covered by the portfolio’s dividend income), was 0.99% for 2016 and 0.97% for 2015. This ratio is more representative of the ongoing efficiency of the administration of the Fund.

SBC.PR.A was added to the HIMIPref™ universe in 2008. It was originally scheduled for redemption in 2012, but was extended with a coupon of 4.5%. The new coupon rate of 5.0% should, I think be sufficient to ensure that it continues to trade at a slight premium to par. On that basis, a recommendation not to retract will be superfluous, but if disaster strikes I will post something before the October 31 retraction notification deadline.

Assiduous Reader JB writes in and brings to my attention a nuance in the conversion of Artis preferred units that had previously escaped me:

You have probably dealt with this question, so I apologize if that is the case.
I own a small position in Artis Preferred Series C. It is a $US pref. (I own lots of other preferreds.)
In the prospectus it states (I’m paraphrasing) that the CRA would consider conversion to the D shares a taxable event. I’m at a loss to determine why this is the case, since in another 5 years, I could convert back, should that be my choice.
Is this just an anomaly, or is this really the CRA’s position?

Well! First of all, let’s have a look at the prospectuses (not directly linked because rights are owned by the Canadian Securities Administrators, and why would they allow convenient access to public documents of interest to investors?)

Preferred Units, Series A (AX.PR.A) Prospectus on SEDAR under “Artis Real Estate Investment Trust Jul 25 2012 20:10:04 ET Prospectus supplement – English PDF 288 K”

In general, a disposition or deemed disposition of a Series A or Series B Unit will give rise to a capital gain (or a capital loss) equal to the amount by which the proceeds of disposition, net of any reasonable costs of disposition, exceed (or are exceeded by) the adjusted cost base of the Series A or Series B Unit, as the case may be, to the Preferred Unitholder. In the Ruling, the CRA expresses the preliminary view that the reclassification of Series A Units as Series B Units (or Series B Units as Series A Units) would likely result in a taxable disposition at that time. In such circumstances, a Preferred Unitholder will generally be considered to have disposed of the reclassified Preferred Units for proceeds of disposition equal to the fair market value of the Preferred Units into which such units are reclassified.

Preferred Units, Series C (AX.PR.U) Prospectus on SEDAR under “Artis Real Estate Investment Trust Sep 11 2012 16:24:11 ET Prospectus supplement – English PDF 287 K”

In general, a disposition or deemed disposition of a Series C or Series D Unit will give rise to a capital gain (or a capital loss) equal to the amount by which the proceeds of disposition, net of any reasonable costs of disposition, exceed (or are exceeded by) the adjusted cost base of the Series C or Series D Unit, as the case may be, to the Preferred Unitholder. In the Ruling, the CRA expresses the preliminary view that the reclassification of Series A Units as Series B Units (or Series B Units as Series A Units) would likely result in a taxable disposition at that time and the same consideration will apply on a reclassification of Series C Units as Series D Units (or Series D Units as Series C Units). In such circumstances, a Preferred Unitholder will generally be considered to have disposed of the reclassified Preferred Units for proceeds of disposition equal to the fair market value of the Preferred Units into which such units are reclassified.

Preferred Units, Series E (AX.PR.E) Prospectus on SEDAR under “Artis Real Estate Investment Trust Mar 14 2013 12:50:30 ET Prospectus supplement – English PDF 298 K”

In general, a disposition or deemed disposition of a Series E or Series F Unit will give rise to a capital gain (or a capital loss) equal to the amount by which the proceeds of disposition, net of any reasonable costs of disposition, exceed (or are exceeded by) the adjusted cost base of the Series E or Series F Unit, as the case may be, to the Preferred Unitholder. In the Ruling, the CRA expresses the preliminary view that the reclassification of Series A Units as Series B Units (or Series B Units as Series A Units) would likely result in a taxable disposition at that time and the same consideration will apply on a reclassification of Series E Units as Series F Units (or Series F Units as Series E Units). In such circumstances, a Preferred Unitholder will generally be considered to have disposed of the reclassified Preferred Units for proceeds of disposition equal to the fair market value of the Preferred Units into which such units are reclassified.

Preferred Units, Series G (AX.PR.G) Prospectus on SEDAR under “Artis Real Estate Investment Trust Jul 22 2013 13:34:56 ET Prospectus supplement – English PDF 304 K”

In general, a disposition or deemed disposition of a Series G or Series H Unit will give rise to a capital gain (or a capital loss) equal to the amount by which the proceeds of disposition, net of any reasonable costs of disposition, exceed (or are exceeded by) the adjusted cost base of the Series G or Series H Unit, as the case may be, to the Preferred Unitholder. In the Ruling, the CRA expresses the preliminary view that the reclassification of Series A Units as Series B Units (or Series B Units as Series A Units) would likely result in a taxable disposition at that time and the same consideration will apply on a reclassification of Series G Units as Series H Units (or Series H Units as Series G Units). In such circumstances, a Preferred Unitholder will generally be considered to have disposed of the reclassified Preferred Units for proceeds of disposition equal to the fair market value of the Preferred Units into which such units are reclassified.

So in each case the company has warned of a preliminary view by the CRA that conversion is a taxable event, which all appears to be based on the view they took when examining the first issue. Of course, it’s only preliminary, but to those of us who are unwilling to spend six figures discussing the matter in tax court, that counts as definitive.

As to why this should be the case … I simply don’t know. I suspect it has a lot to do with the idea that (from the AX.PR.G prospectus):

The Canadian federal income tax considerations that may arise in connection with the acquisition, holding, disposition or reclassification of preferred units of a trust are, in some respects, materially different from the acquisition, holding, disposition or exchange of preferred shares of a corporation.
…
“REIT Exception” means the exception from the SIFT Rules available to a SIFT trust which satisfies a series of conditions relating to the nature of a SIFT’s revenue and property, as more particularly described below under “Principal Canadian Federal Income Tax Considerations – SIFT Rules and REIT Exception”;
…
“SIFT Rules” means the amendments to provisions of the Tax Act proclaimed in force on June 22, 2007, as amended, that implement the changes announced as part of the Tax Fairness Plan proposed by the Minister of Finance (Canada) on October 31, 2006 which modify the tax treatment of “specified investment flow-throughs”, including publicly traded income trusts and limited partnerships, and the tax treatment of their unitholders in the manner described below under “Principal Canadian Federal Income Tax Considerations – SIFT Rules and REIT Exception”;
…
The balance of this summary assumes that Artis qualifies as a mutual fund trust and will continue to so qualify at all material times. If Artis were not to qualify as a mutual fund trust, the income tax considerations described below would, in some respects, be materially different.

… but this is getting into arcane interpretations of tax law in which a simple Portfolio Manager such as myself should take the view that anything he says will be wrong. However, I must say that I am surprised that Artis did not highlight this unusual nuance in its notice of extension for AX.PR.A.

Brompton Group has announced (although not yet on their website because they’re … um, well, I’ve sent an eMail to my friend ChrisC Update: Now available here):

Life & Banc Split Corp. (the “Company”) (TSX:LBS)(TSX:LBS.PR.A)is pleased to announce it is undertaking an overnight treasury offering of class A and preferred shares (respectively, the “Class A Shares” and “Preferred Shares”).

The sales period for this overnight offering will end at 9:00 a.m. (ET) on Tuesday September 26, 2017. The offering is expected to close on or about October 4, 2017 and is subject to certain closing conditions including approval by the Toronto Stock Exchange (“TSX”).

The Class A Shares will be offered at a price of $9.90 per Class A Share for a distribution rate of 12.1% on the issue price, and the Preferred Shares will be offered at a price of $10.00 per Preferred Share for a yield to maturity of 4.8%. The closing price on the TSX for each of the Class A and Preferred Shares on September 22, 2017 was $10.10 and $10.20, respectively. The Class A and Preferred Share offering prices were determined so as to be non-dilutive to the most recently calculated net asset value per unit of the Company (calculated as at September 21, 2017), as adjusted for dividends and certain expenses to be accrued prior to or upon settlement of the offering.

The Company invests in a portfolio (the “Portfolio”) consisting of common shares of the six largest Canadian banks and the four major publicly traded Canadian life insurance companies. The Portfolio consists of common shares of the following Canadian banks and Canadian life insurance companies:

The Bank of Nova Scotia	Royal Bank of Canada
National Bank of Canada	Industrial Alliance Insurance and Financial Services Inc.
The Toronto-Dominion Bank	Great-West Lifeco Inc.
Canadian Imperial Bank of Commerce	Manulife Financial Corporation
Bank of Montreal Sun	Life Financial Inc.

The investment objectives for the Class A Shares are to provide holders with regular monthly cash distributions targeted to be $0.10 per Class A Share and to provide the opportunity for growth in the net asset value per Class A Share.

The investment objectives for the Preferred Shares are to provide holders with fixed cumulative preferential quarterly cash distributions, currently in the amount of $0.11875 per Preferred Share, and to return the original issue price to holders of Preferred Shares on November 29, 2018.

The syndicate of agents for the offering is being led by RBC Capital Markets, CIBC Capital Markets and Scotiabank.

The Company is also pleased to announce that its board of directors has approved an extension of the maturity date of the Class A and Preferred Shares of the Company for an additional term to October 30, 2023. The Preferred Share dividend rate for the extended term will be announced at least 60 days prior to the original November 29, 2018 maturity date. The new dividend rate will be determined based on the market yields for Preferred Shares with similar terms.

So the Whole Units are being offered for a total of 19.90, vs a NAV of 19.32 as of September 21 – which at least is not as much a premium as we have recently seen elsewhere.

Update, 2017-09-26: The offering was successful:

Life & Banc Split Corp. (the “Company”) is pleased to announce a successful overnight treasury offering of class A and preferred shares (respectively, the “Class A Shares” and “Preferred Shares”). Gross proceeds of the offering are expected to be approximately $81.6 million. The offering is expected to close on or about October 4, 2017 and is subject to certain closing conditions including approval by the Toronto Stock Exchange (the “TSX”). The Company has granted the Agents (as defined below) an over-allotment option, exercisable for 30 days following the closing date of the offering, to purchase up to an additional 15% of the number of Class A Shares and Preferred Shares issued at the closing of the offering.

It will be recalled that VNR.PR.A will reset to 4.62% (paid on par) effective October 15.

Holders of VNR.PR.A have the option to convert to FloatingResets, VNR.PR.B, which will pay 3-month bills plus 281bp on the par value of $25.00, reset quarterly. The deadline for notifying the company of the intent to convert is 5:00 p.m. (Eastern Standard Time) on September 29, 2017; but note that this is a company deadline and that brokers will generally set their deadlines a day or two in advance, so there’s not much time to lose if you’re planning to convert! However, if you miss the brokerage deadline they’ll probably do it on a ‘best efforts’ basis if you grovel in a sufficiently entertaining fashion. The ticker for the new FloatingReset, if it is issued, will be VNR.PR.B.

VNR.PR.A is a FixedReset, 4.35%+281, that commenced trading 2012-6-6 after being announced 2012-5-15. The issue is tracked by HIMIPref™ and has been assigned to the FixedReset subindex.

The most logical way to analyze the question of whether or not to convert is through the theory of Preferred Pairs, for which a calculator is available. Briefly, a Strong Pair is defined as a pair of securities that can be interconverted in the future (e.g., VNR.PR.A and the FloatingReset, VNR.PR.B, that will exist if enough holders convert). Since they will be interconvertible on this future date, it may be assumed that they will be priced identically on this date (if they aren’t then holders will simply convert en masse to the higher-priced issue). And since they will be priced identically on a given date in the future, any current difference in price must be offset by expectations of an equal and opposite value of dividends to be received in the interim. And since the dividend rate on one element of the pair is both fixed and known, the implied average rate of the other, floating rate, instrument can be determined. Finally, we say, we may compare these average rates and take a view regarding the actual future course of that rate relative to the implied rate, which will provide us with guidance on which element of the pair is likely to outperform the other until the next interconversion date, at which time the process will be repeated.

We can show the break-even rates for each FixedReset / FloatingReset Strong Pair graphically by plotting the implied average 3-month bill rate against the next Exchange Date (which is the date to which the average will be calculated).

Click for Big

The market appears to have a distaste at the moment for floating rate product; most of the implied rates until the next interconversion are lower than the current 3-month bill rate and the averages for investment-grade and junk issues are both well below current market rates, at +0.71% and +0.69%, respectively! Whatever might be the result of the next few Bank of Canada overnight rate decisions, I suggest that it is unlikely that the average rate over the next five years will be lower than current – but if you disagree, of course, you may interpret the data any way you like.

Since credit quality of each element of the pair is equal to the other element, it should not make any difference whether the pair examined is investment-grade or junk, although we might expect greater variation of implied rates between junk issues on grounds of lower liquidity, and this is just what we see.

If we plug in the current bid price of the VNR.PR.A FixedReset, we may construct the following table showing consistent prices for its maybe-soon-to-be-issued FloatingReset counterpart given a variety of Implied Breakeven yields consistent with issues currently trading:

Based on current market conditions, I suggest that the FloatingResets that will result from conversion are likely to be cheap and trading below the price of their FixedReset counterparts. Therefore, I recommend that holders of VNR.PR.A continue to hold the issue and not to convert. I will note that, given the apparent cheapness of the FloatingResets, it may be a good trade to swap the FixedReset for the FloatingReset in the market once both elements of each pair are trading and you can – presumably, according to this analysis – do it with a reasonably good take-out in price, rather than doing it through the company on a 1:1 basis. But that, of course, will depend on the prices at that time and your forecast for the path of policy rates over the next five years. There are no guarantees – my recommendation is based on the assumption that current market conditions with respect to the pairs will continue until the FloatingResets commence trading and that the relative pricing of the new pair will reflect these conditions.

Veresen Inc. has announced:

that, after having taken into account all conversion notices received from holders of its outstanding Cumulative Redeemable Preferred Shares, Series A (“Series A Shares”) by the September 15, 2017 deadline for the conversion of the Series A Shares into Cumulative Redeemable Preferred Shares, Series B (“Series B Shares”), less than the 1,000,000 Series A Shares required to give effect to conversions into Series B Shares were tendered for conversion. As a result, none of Veresen’s Series A Shares will be converted into Series B Shares on September 30, 2017.

It will be recalled that VSN.PR.A will reset at 4.464% and that I recommended against conversion.

After all of this, VSN.PR.A is a FixedReset, 4.464%+292, that commenced trading 2012-2-14 with a 4.40% coupon after being announced 2012-2-3. The issue is tracked by HIMIPref™ but has been assigned to the Scraps index on credit concerns. As noted in the earlier press release, there is an exchange offer from PPL outstanding that will take effect on closing of the Plan of Arrangement between the companies.

TransAlta Corporation has announced:

that after taking into account all election notices received by the September 15, 2017 deadline for the conversion of the Cumulative Redeemable Rate Reset Preferred Shares, Series E (the “Series E Shares”) into Cumulative Redeemable Floating Rate Preferred Shares, Series F (the “Series F Shares”), there were 133,969 Series E Shares tendered for conversion, which is less than the one million shares required to give effect to conversions into Series F Shares. As a result, none of the Series E Shares will be converted into Series F Shares on September 30, 2017.

It will be recalled that TA.PR.H will reset at 5.194% and that I recommended against conversion.

As a result of all this TA.PR.H is now a FixedReset, 5.194%+365, that commenced trading 2012-8-10 with a 5.00% coupon after being announced 2012-8-2. The issue is tracked by HIMIPref™ but has been assigned to the Scraps index on credit concerns.

p>Artis Real Estate Investment Trust has announced:

that it has determined, based upon the election of holders of Preferred Units, Series A (“Series A Units”) (AX.PR.A), that less than 500,000 Series B Units would be issued on September 30, 2017 and consequently, no holders of Series A Units are entitled to reclassify their Series A Units to Series B Units on September 30, 2017.

Accordingly, all 3,450,000 Series A Units will remain issued and outstanding following September 30, 2017 and during the subsequent five year period commencing October 1, 2017, holders will be entitled to receive distributions, if, as and when declared by the Board of Trustees of Artis, in an annual amount per Series A Unit determined by multiplying the Annual Fixed Distribution Rate of 5.662% per annum by $25.00, payable quarterly on the last business day of each of March, June, September and December in each year during such period.

It will be recalled that AX.PR.A will reset to 5.662% and that I recommended against conversion.

As a result of all this AX.PR.A is a FixedReset, 5.662%+406, that was announced 2012-7-24 with a 5.25% coupon but only added to HIMIPref™ when the issue was rated by DBRS in 2013. It is tracked by HIMIPref™ but relegated to the Scraps subindex on credit concerns.

It is important to note that according to the prospectus supplement (available at SEDAR dated July 25, 2012; I am not permitted to link to it directly due to the cosy little contract the soon-to-be-bank-owned CDS has signed with regulators), taxation is complicated: “Artis’ income and net taxable gains for the purposes of the Tax Act will be allocated to the holders of Units and Preferred Units in the same proportion as the distributions received by such holders.” Particulars of the tax status of Artis’ distributions are published by Artis on their website.