Category: Issue Comments

HSBC Bank Canada has announced:

HSBC Bank Canada (HSB.PR.E-TMX) today announced its intention to redeem all of its issued and outstanding Non-Cumulative 5-Year Rate Reset Class 1 Preferred Shares Series E (the “Series E shares”), on 30 June 2014, for cash at a redemption price of $25.00 per share.

There are 10,000,000 Series E shares outstanding, representing $250 million of capital. The redemption of the Series E shares will be financed out of the general corporate funds of HSBC Bank Canada.

Separately from the redemption price, the final quarterly dividend of $0.4125 for each of the Series E shares will be paid in the usual manner on 30 June 2014 to shareholders of record on 13 June 2014.

No surprises here … HSB.PR.E is a FixedReset, 6.60%+485, announced 2009-3-23 and closing 2009-4-8 after an embarrassing hiccup.

Scotia Managed Companies has announced:

R Split III Corp. (the “Company”) announced today that it has called 390,230 Preferred Shares for cash redemption on May 30, 2014 (in accordance with the Company’s Articles) representing approximately 39.091% of the outstanding Preferred Shares as a result of the annual retraction of 780,460 Capital Shares by the holders thereof. The Preferred Shares shall be redeemed on a pro rata basis, so that each holder of Preferred Shares of record on May 28, 2014 will have approximately 39.091 % of their Preferred Shares redeemed. The redemption price for the Preferred Shares will be $13.60 per share.

In addition, holders of a further 10,000 Capital Shares and 5,000 Preferred Shares have deposited such shares concurrently for retraction on May 30, 2014. As a result, a total of 790,460 Capital Shares and 395,230 Preferred Shares, or approximately 39.394% of both classes of shares currently outstanding, will be redeemed.

Holders of Preferred Shares that are on record for dividends but have been called for redemption will be entitled to receive dividends thereon which have been declared but remain unpaid up to but not including May 30, 2014.

Payment of the amount due to holders of Preferred Shares will be made by the Company on May 30, 2014. From and after May 30, 2014 the holders of Preferred Shares that have been called for redemption will not be entitled to dividends or to exercise any rights in respect of such shares except to receive the amount due on redemption.

R Split III Corp. is a mutual fund corporation created to hold a portfolio of common shares of Royal Bank of Canada. Capital Shares and Preferred Shares of R Split III Corp. are listed for trading on The Toronto Stock Exchange under the symbols RBS and RBS.PR.B respectively.

RBS.PR.B was last mentioned on PrefBlog when it was upgraded to Pfd-2 by DBRS in September 2013. It is not tracked by HIMIPref™ since, with only about a million shares outstanding with a par value of $13.60, it’s too small – and now it’s getting smaller!

Standard & Poor’s has announced:

• •We are revising our outlook on Emera Inc. to stable from negative.
• •The outlook revision reflects our assessment of progress on Emera’s Maritime Link project and our view that the company’s financial metrics are likely to remain in the “significant” category over the next two-to-three years.
• •We have also affirmed our ratings, including our ‘BBB+’ long-term corporate credit ratings, on Emera and subsidiary Nova Scotia Power Inc.

…
“The outlook revision reflects our view of the progress Emera has made on the Maritime Link project, including regulatory approvals and issuance of debt guaranteed by the Government of Canada,” said Standard & Poor’s credit analyst Stephen Goltz. The revision also reflects our view that Emera’s financial metrics are likely to remain in the “significant” category over the next two-to-three years.

The ratings on Emera reflect what Standard & Poor’s views as the company’s “excellent” business risk profile and significant financial risk profile.
…
Emera’s significant financial risk profile reflects what we view as the stability and predictability of the company’s regulated cash flow. We project Emera’s adjusted funds from operations (AFFO)-to-debt ratio to range from 12%-13% in the next two years. We have added to the company’s consolidated debt C$250 million and C$600 million of debt for 2014 and 2015, respectively, for the Maritime Link project, reflecting the project’s importance to Emera and our view that the company would support the project if required.

The stable outlook reflects our view of Emera’s stable and predictable cash flows, which the company’s regulated operations in generally supportive regulatory environments underpin. We expect Emera’s FFO-to-debt ratio to range from 12%-13% in the next two years.

Emera has three issues of preferred shares outstanding, EMA.PR.A, EMA.PR.C (FixedResets) and EMA.PR.E (PerpetualDiscount). All are tracked by HIMIPref™; all are relegated to the Scraps index on credit concerns. S&P continues to rate the issues P-2(low); they are rated Pfd-3(high), under Review-Developing by DBRS as reported on PrefBlog in August 2013.

Standard and Poor’s has announced:

• •We are revising our outlook on Nova Scotia Power Inc. (NSPI) to stable from negative.
• •The outlook revision reflects our outlook revision to parent Emera Inc. because we believe that NSPI is “core” to Emera.
• •We have also affirmed our ratings, including our ‘BBB+’ long-term corporate credit rating, on both NSPI and Emera.

…
The outlook revision on NSPI reflects the outlook revision on Emera. “Because we believe that NSPI is a “core” holding of Emera Inc. we equalize the ratings on the two entities,” said Standard & Poor’s credit analyst Stephen Goltz.

The outlook revision on Emera reflects our view of the progress Emera has made on the Maritime Link project, including regulatory approvals and issuance of debt guaranteed by the Government of Canada. The revision also reflects our view that Emera’s financial metrics are likely to remain in the “significant” category over the next two-to-three years.

The ratings on Emera reflect what Standard & Poor’s views as the company’s “excellent” business risk profile and significant financial risk profile.

NSI.PR.D was last mentioned on PrefBlog when it was confirmed by DBRS at Pfd-2(low) on February 19, 2014. S&P continues to rate it as P-2(low).

NSI.PR.D is tracked by HIMIPref™, but is relegated to the Scraps index on volume concerns.

Quadravest has announced:

Dividend 15 Split Corp. (the “Company”) is pleased to announce that 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 and will also include BMO Capital Markets, TD Securities Inc., GMP Securities L.P. and Canaccord Genuity Corp.

The Class A Shares will be offered at a price of $12.00 per Class A Share to yield 10.0% on the issue price and the Preferred Shares will be offered at a price of $10.00 per Preferred Share to yield 5.25% on the issue price. The closing price on the TSX of each of the Class A Shares and Preferred Shares on May 9, 2014 was $12.17 and $10.26, respectively.

Since the Company commenced on March 16, 2004, it has exceeded its distribution objectives. The aggregate dividends paid on Class A shares have been $15.60 per share, representing 121 regular consecutive monthly distributions, plus six special distributions. The Preferred Shares have received a total of $5.31 per share for a combined total distribution of $20.91 per unit paid by the Company. All distributions have been made in tax advantage eligible Canadian dividends or capital gains dividends.

The net proceeds of the secondary offering will be used by the Company to invest in an actively managed portfolio of dividend yielding common shares which includes each of the 15 Canadian companies listed below:

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 $0.04375 per Preferred Share to yield 5.25% per annum on the original issue price; and
ii. on or about December 1, 2019, to pay the holders of the Preferred Shares the original issue price of those shares.

Class A Shares:
i. to provide holders of the Class A Shares with regular monthly cash dividends initially targeted to be $0.10 per Class A; and
ii. on or about December 1, 2019, to pay the 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. (Toronto time) on May 13, 2014.

A preliminary short form prospectus containing important information relating to the Class A and Preferred Shares has been filed with securities commissions or similar authorities in all provinces of Canada. The preliminary short form prospectus is still subject to completion or amendment. Copies of the preliminary short form prospectus may be obtained from your registered financial advisor using the contact information for such advisor, or from representatives of the underwriters listed above. There will not be any sale or any acceptance of an offer to buy the Class A or Preferred Shares until a receipt for the final short form prospectus has been issued.

Given that the fund’s April 30 Valuation was $20.52, the matched units are hardly a bargain! Flip quickly, boys!!

DFN.PR.A was last mentioned on PrefBlog when they did a secondary offering last September. DFN.PR.A is tracked by PrefBlog, but relegated to the Scraps index on credit concerns.

Manulife Financial Corporation has announced:

its intention to redeem all of its outstanding 18,000,000 Non-cumulative Rate Reset Class A Shares Series 4 (“Series 4 Preferred Shares”) for cash on June 19, 2014. The Series 4 Preferred Shares are redeemable at Manulife’s option on June 19, 2014, at a redemption price per Series 4 Preferred Share equal to C$25.00 for an aggregate total of C$450 million. Formal notice will be delivered to holders of Series 4 Preferred Shares in accordance with the terms outlined in the share provisions for the Series 4 Preferred Shares.

Separately from the redemption price, the final quarterly dividend of C$0.4125 per Series 4 Preferred Share will be paid in the usual manner on June 19, 2014 to shareholders of record on May 13, 2014. After the Series 4 Preferred Shares are redeemed, holders of Series 4 Preferred Shares will cease to be entitled to distributions of dividends and will not be entitled to exercise any rights as holders other than to receive the redemption price.

MFC.PR.D is a FixedReset, 6.60%+456, and given the size of the Issue Reset Spread there is no surprise regarding the redemption call. The issue commenced trading 2009-3-4 after being announced 2009-2-24.

Sun Life Financial Inc. has announced:

its intention to redeem all of its $250,000,000 Class A Non-Cumulative 5-Year Rate Reset Preferred Shares Series 6R (the “Series 6R Shares”) on June 30, 2014.

The Series 6R Shares are redeemable at Sun Life Financial Inc.’s option on June 30, 2014 (the “Redemption Date”) at a redemption price of $25.00 per share, together with all declared and unpaid dividends on such share to but excluding the Redemption Date. Notice will be delivered to the holders of the Series 6R Shares in accordance with the terms governing the Series 6R Shares.

Separately from the payment of the redemption price, the final quarterly dividend of $0.375 per share for the Series 6R Shares will be paid in the usual manner on June 30, 2014, to shareholders of record on May 28, 2014.

This comes as no surprise, since SLF.PR.F is a 6.00%+379 FixedReset that commenced trading 2009-5-20 after being announced 2009-5-8.

Canadian Utilities has announced:

CU Inc. announced today that it will redeem on June 1, 2014 all of its outstanding Cumulative Redeemable Preferred Shares Series 2 at a price of $25.00 per share. The $160 million aggregate cost of redemption will be funded from cash.

CIU.PR.B is a FixedReset, 6.70%+481, which commenced trading March 27, 2009 after being announced March 10, 2009. With such a whacking great Issue Reset Spread, the call for redemption comes as no surprise.

CIU.PR.B has been tracked by HIMIPref™ since issuance and is assigned to the FixedReset subindex.