Category: Issue Comments

BPO.PR.E settled today, but I was unable to find a press release. Which is not to say that there is no press release, of course – Brookfield’s website is an incredibly poorly designed labyrinth, although it looks really cool and groovy and awesome, man. Have another spliff, bro!

BPO.PR.E is a FixedReset, 5.10%+396M510, announced 2017-2-9. It will be tracked by HIMIPref™ but relegated to the Scraps index on credit concerns.

The issue traded 697,623 shares today in a range of 24.92-02 before closing at 24.99-00, 10×188. Vital statistics are:

DBRS formally assigned a Pfd-3 rating to the issue:

DBRS Limited (DBRS) has today assigned a rating of Pfd-3 with a Stable trend to the $275 million Class AAA Preference Shares, Series EE (Series EE Preferred Shares), issued by Brookfield Office Properties Inc. (Brookfield).

The Series EE Preferred Shares will rank equally and rateably with Brookfield’s existing Class AAA preference shares and in priority of the Company’s Class B preferred shares and common shares.

DBRS understands that the net proceeds from the sale of the Series EE Preferred Shares will be used for general corporate purposes, which may include the redemption of existing preferred shares.

Implied Volatility analysis suggests that the issue is a little expensive, but it will be noted that in addition to all the usual assumptions made in this analysis, this conclusion also depends on the assumption that the issues with a reset-floor are equivalent to issues without a reset floor … which is somewhat controversial!

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Brookfield Renewable Partners L.P. has announced that it has:

completed its previously announced issue of Cumulative Minimum Rate Reset Class A Preferred Limited Partnership Units, Series 11 (the “Series 11 Preferred Units”). The offering was underwritten by a syndicate led by TD Securities Inc., CIBC Capital Markets, RBC Capital Markets and Scotiabank.

Brookfield Renewable issued 10,000,000 Series 11 Preferred Units at a price of $25.00 per unit, for total gross proceeds of CDN$250,000,000.

The Series 11 Preferred Units will commence trading on the Toronto Stock Exchange this morning under the ticker symbol BEP.PR.K.

BEP.PR.K is a FixedReset, 5.00%+382M500, announced 2017-2-7. Note that distributions on this security will be a mix of ordinary income and return of capital. It will be tracked by HIMIPref™ but relegated to the Scraps subindex on credit concerns.

The issue traded 784,722 shares today in a range of 24.88-00 before closing at 24.97-99, 54×45. Vital statistics are:

Update, 2017-10-11: Note that if we look at the prospectus (available on SEDAR under ““Brookfield Renewable Partners L.P. Feb 7 2017 18:36:01 ET Prospectus (non pricing) supplement – English PDF 284 K”:

The reclassification of a Series 11 Preferred Unit into a Series 12 Preferred Unit or a Series 12 Preferred Unit into a Series 11 Preferred Unit, whether pursuant to an election made by the Resident Holder or pursuant to an automatic reclassification, may be considered to be a disposition of the Series 11 Preferred Unit or Series 12 Preferred Unit by the Resident Holder. The CRA’s position is that the conversion of an interest in a partnership into another interest in the partnership may result in a disposition of the partnership interest by the holder if the conversion results in a significant change in the rights and obligations of the holder in respect of the converted interest, including a significant change in the percentage interest in the profits of the partnership. Whether or not the reclassification of Series 11 Preferred Units into Series 12 Preferred Units or Series 12 Preferred Units into Series 11 Preferred Units would result in a significant change in the percentage interest of a Resident Holder in the profits of the Partnership is a question of fact that depends upon the facts and circumstances that exist at the time of the reclassification.

Quadravest has announced:

Financial 15 Split Corp. (the “Company”) is pleased to announce it has filed a preliminary short form prospectus in each of the provinces of Canada with respect to an offering of Preferred Shares and Class A Shares of the Company. The offering will be co-led by National Bank Financial Inc., CIBC, RBC Capital Markets, Scotia Capital Inc., and will also include BMO Capital Markets, GMP Securities L.P., Canaccord Genuity Corp., Raymond James, Desjardins Securities Inc., Echelon Wealth Partners, Mackie Research Capital Corporation and Manulife Securities Incorporated.

The Preferred Shares will be offered at a price of $10.00 per Preferred Share to yield 5.25% and the Class A Shares will be offered at a price of $10.50 per Class A Share to yield 14.37%.

The closing price on the TSX of each of the Preferred Shares and the Class A Shares on February 14, 2017 was $10.24
and $10.79, respectively.

Since inception of the Company, the aggregate dividends paid on the Preferred Shares have been $6.94 per share and the aggregate dividends paid on the Class A Shares have been $16.00 per share, for a combined total of $22.94. All
distributions to date have been made in tax advantage eligible Canadian dividends or capital gains dividends.

The net proceeds of the offering will be used by the Company to invest 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.

The Company’s investment objectives are:

Preferred Shares:
i. to provide holders of the Preferred Shares with fixed, cumulative preferential monthly cash dividends currently in
the amount of 5.25% annually, to be set by the Board of Directors annually subject to a minimum of 5.25% until 2020; and
ii. on or about the termination date, currently December 1, 2020 (subject to further 5 year extensions thereafter), to pay the holders of the Preferred Shares $10.00 per Preferred Share.

Class A Shares:
i. to provide holders of the Class A Shares with regular monthly cash dividends in an amount to be determined by the Board of the Directors; and
ii. to permit holders to participate in all growth in the net asset value of the Company above $10 per Unit, by paying holders on or about the termination date of December 1, 2020 (subject to further 5 year extensions thereafter) such amounts as remain in the Company after paying $10 per Preferred Share.

The sales period of this overnight offering will end at 9:00 a.m. EST on February 16, 2017.

FTN.PR.A is tracked by HIMIPref™ but is relegated to the Scraps index on credit concerns.

Update, 2017-2-17: The offering appears to have been successful:

Financial 15 Split Corp. (the “Company”) is pleased to announce it has completed the overnight marketing of up to 2,980,000 Preferred Shares and up to 2,980,000 Class A Shares of the Company. The total proceeds of the offering are expected to be approximately $61.1 million.

Manulife Financial Corporation has announced:

that it does not intend to exercise its right to redeem all or any of its currently outstanding 10,000,000 Non-cumulative Rate Reset Class 1 Shares Series 7 (the “Series 7 Preferred Shares”) (TSX: MFC.PR.H) on March 19, 2017. As a result, subject to certain conditions described in the prospectus supplement dated February 14, 2012 relating to the issuance of the Series 7 Preferred Shares (the “Prospectus”), the holders of the Series 7 Preferred Shares have the right, at their option, to convert all or part of their Series 7 Preferred Shares on a one-for-one basis into Non-cumulative Floating Rate Class 1 Shares Series 8 of Manulife (the “Series 8 Preferred Shares”) on March 19, 2017. A formal notice of the right to convert Series 7 Preferred Shares into Series 8 Preferred Shares will be sent to the registered holders of the Series 7 Preferred Shares in accordance with the share conditions of the Series 7 Preferred Shares. Holders of Series 7 Preferred Shares are not required to elect to convert all or any part of their Series 7 Preferred Shares into Series 8 Preferred Shares. Holders who do not exercise their right to convert their Series 7 Preferred Shares into Series 8 Preferred Shares on such date will retain their Series 7 Preferred Shares, unless automatically converted in accordance with the conditions below.

The foregoing conversion right is subject to the conditions that: (i) if, after March 6, 2017, Manulife determines that there would be less than 1,000,000 Series 7 Preferred Shares outstanding on March 20, 2017, then all remaining Series 7 Preferred Shares will automatically be converted into an equal number of Series 8 Preferred Shares on March 19, 2017, and (ii) alternatively, if, after March 6, 2017, Manulife determines that there would be less than 1,000,000 Series 8 Preferred Shares outstanding on March 20, 2017, then no Series 7 Preferred Shares will be converted into Series 8 Preferred Shares. In either case, Manulife will give written notice to that effect to any registered holders of Series 7 Preferred Shares affected by the preceding minimums on or before March 12, 2017.

The dividend rate applicable to the Series 7 Preferred Shares for the 5-year period commencing on March 20, 2017, and ending on March 19, 2022, and the dividend rate applicable to the Series 8 Preferred Shares for the 3-month period commencing on March 20, 2017, and ending on June 19, 2017, will be determined and announced by way of a news release on February 21, 2017. Manulife will also give written notice of these dividend rates to the registered holders of Series 7 Preferred Shares.

Beneficial owners of Series 7 Preferred Shares who wish to exercise their right of conversion should instruct their broker or other nominee to exercise such right before 5:00 p.m. (Toronto time) on March 6, 2017. Conversion inquiries should be directed to Manulife’s Registrar and Transfer Agent, CST Trust Company, at 1-800-387-0825.

Subject to certain conditions described in the Prospectus, Manulife may redeem the Series 7 Preferred Shares, in whole or in part, on March 19, 2022 and on March 19 every five years thereafter and may redeem the Series 8 Preferred Shares, in whole or in part, after March 19, 2017.

The Toronto Stock Exchange (“TSX”) has conditionally approved the listing of the Series 8 Preferred Shares effective upon conversion. Listing of the Series 8 Preferred Shares is subject to Manulife fulfilling all the listing requirements of the TSX and, upon approval, the Series 8 Preferred Shares will be listed on the TSX under the trading symbol “MFC.PR.S”.

MFC.PR.H is a FixedReset, 4.60%+313, that commenced trading 2012-2-22 after being announced 2012-2-14.

I will report the reset rate on MFC.PR.H when it becomes available.

TransAlta Corporation has announced:

that it is not proceeding with the previously announced transaction pursuant to which all the currently outstanding first preferred shares in the capital of the Corporation would be exchanged for shares in a single new series of cumulative redeemable minimum rate reset first preferred shares in the capital of the Corporation. In light of the decision to terminate such transaction, the special meetings of preferred shareholders of the Corporation scheduled for February 16, 2017 have been cancelled.

This is wonderful news – it was a horrible plan, at least so far as investors were concerned; it was only good for the company and bank employees hoping to earn sleaze fees for a favourable vote.

This follows previous posts on this topic:

• TA Proposes Sleazy Exchange Offer
• TransAlta plays the Grinch with its preferred share holders
• TransAlta Nudges TA.PR.D Offer; Hopes To Pay Sleaze Fees To Banks
• TransAlta pref shareholders not happy with consolidation plan
• TransAlta Corp takes to the airwaves to spread the advantages of its pref share consolidation

Affected issues are TA.PR.D, TA.PR.E, TA.PR.F, TA.PR.H and TA.PR.J.

There was high volume but little price change today after the announcement:

On January 26, Dividend 15 Split Corp. announced:

it has filed a preliminary short form prospectus in each of the provinces of Canada with respect to an offering of Preferred Shares and Class A Shares of the Company. The offering will be co-led by National Bank Financial Inc., CIBC, RBC Capital Markets, Scotia Capital Inc., and will also include BMO Capital Markets, TD Securities Inc., GMP Securities L.P., Canaccord Genuity Corp., Raymond James, Desjardins Securities Inc., Echelon Wealth Partners, Mackie Research Capital Corporation and Manulife Securities Incorporated.. The Preferred Shares will be offered at a price of $10.00 per Preferred Share to yield 5.25% and the Class A Shares will be offered at a price of $10.95 per Class A Share to yield 10.96%. The closing price on the TSX of each of the Preferred Shares and the Class A Shares on January 25, 2017 was $10.41 and $11.20, respectively.

Since inception of the Company, the aggregate dividends declared on the Preferred Shares have been $6.76 per share and the aggregate dividends declared on the Class A Shares have been $18.90 per share (including five special distributions of $0.25 per share, one special distribution of $0.50 per share and one special stock dividend of $1.75 per share), for a combined total of $25.66 per unit. All distributions to date have been made in tax advantage eligible Canadian dividends or capital gains dividends. The net proceeds of the offering will be used by the Company to invest in an actively managed, high quality portfolio consisting of 15 dividend yielding Canadian companies as
follows:

Bank of Montreal	Enbridge Inc.	TELUS Corporation
The Bank of Nova Scotia	Manulife Financial Corp.	Thomson-Reuters Corporation
BCE Inc.	National Bank of Canada	The Toronto-Dominion Bank
Canadian Imperial Bank of Commerce	Royal Bank of Canada	TransAlta Corporation
CI Financial Corp.	Sun Life Financial Inc.	TransCanada Corporation

The Company’s investment objectives are:
Preferred Shares:
i. to provide holders of the Preferred Shares with fixed, cumulative preferential monthly cash dividends in the amount of 5.25% annually; and
ii. on or about the termination date, currently December 1, 2019 (subject to further 5 year extensions thereafter), to pay the holders of the Preferred Shares $10.00 per Preferred Share.

Class A Shares:
i. to provide holders of the Class A Shares with regular monthly cash dividends currently targeted to be $0.10 per share; and
ii. on or about the termination date, currently December 1, 2019 (subject to further 5 year extensions thereafter) to pay holders of Class A Shares at least the original issue price of those shares.

The sales period of this overnight offering will end at 9:00 a.m. EST on January 27, 2017.

Today the company announced:

Dividend 15 Split Corp. (the “Company”) is pleased to announce it has completed the overnight marketing of up to 3,056,000 Preferred Shares and up to 3,056,000 Class A Shares of the Company. The total proceeds of the offering are expected to be approximately $64.0 million.

On January 26, Brompton Group announced (nb: slight change in table layout … JH):

Brompton Oil Split Corp. (the “Company”) is pleased to announce it is undertaking an overnight treasury offering of class A and preferred shares.

The class A shares will be offered at a price of $9.75 for a distribution rate of 12.3% on the issue price, and the preferred shares will be offered at a price of $10.00 for a yield to maturity of 5.2%. The closing price on the Toronto Stock Exchange (“TSX”) for each of the class A and preferred shares on January 25, 2017 was $10.10 and $10.16, 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, as adjusted for dividends and certain expenses to be accrued prior to or upon settlement of the offering.

The sales period of this overnight offering will end at 9:00 a.m. (ET) on January 27, 2017. The offering is expected to close on or about February 3, 2017 and is subject to certain closing conditions including approval by the TSX.

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

The Company invests in a portfolio of equity securities of large capitalization North American oil and gas issuers, primarily focused on those with significant exposure to oil. All portfolio securities are S&P/TSX Composite Index or S&P 500 Index constituents which have a market capitalization of at least $2 billion and pay a dividend. Currently, the portfolio consists of common shares of the following companies:

Anadarko Petroleum Corporation	Cimarex Energy Co.	Whitecap Resources Inc.
Pioneer Natural Resources Company	Apache Corporation	Crescent Point Energy Corporation
PrairieSky Royalty Ltd.	ARC Resources Ltd.	Devon Energy Corporation
Suncor Energy Inc.	Canadian Natural Resources Limited	EOG Resources Inc.
Vermilion Energy Inc.	Cenovus Energy Inc.	Occidental Petroleum Corporation

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 $0.1250 per preferred share, and to return the original issue price to holders of preferred shares on the Company’s maturity date (March 31, 2020).

Today they announced:

Brompton Oil Split Corp. (the “Company”) is pleased to announce the results of its overnight treasury offering of class A and preferred shares. Gross proceeds of the offering are expected to be approximately $11 million. The offering is expected to close on or about February 3, 2017 and is subject to customary closing conditions including approval from the Toronto Stock Exchange (the “TSX”).

Well, another $5-million-odd worth on the market won’t solve OSP.PR.A’s liquidity problems, but every little bit helps!

Update, 2017-2-3: Brompton Group has announced:

Brompton Oil Split Corp. (the “Company”) is pleased to announce that it has completed a treasury offering of 549,800 class A shares and 549,800 preferred shares for aggregate gross proceeds of approximately $11 million. The class A shares and preferred shares will trade on the Toronto Stock Exchange (the “TSX”) under the existing symbols OSP (class A shares) and OSP.PR.A (preferred shares).

The class A shares were offered at a price of $9.75 per class A share and the preferred shares were offered at a price of $10.00 per preferred share. The class A and preferred share offering prices were determined so as to be non-dilutive to the net asset value per unit of the Company as of the pricing date, as adjusted for dividends and certain expenses accrued prior to closing of the offering.