Category: Issue Comments

Dundee Corporation has announced:

that, further to its earlier press releases (December 14, 2012, April 15, 2013 and May 15, 2013), the proposed corporate restructuring, through a tax efficient statutory plan of arrangement (the “Arrangement”), has received the requisite shareholder approval at the Corporation’s annual and special meeting of shareholders held today (the “Meeting”). The Arrangement was approved by 98.66% of the Class A Subordinate Voting Shares of the Corporation voted at the Meeting, 100% of the Class B Common Shares of the Corporation voted at the Meeting and 98.26% of the First Preference Shares, Series 1 of the Corporation voted at the Meeting. As required under Canadian securities laws, the Arrangement was also approved by 98.57% of the Class A Subordinate Voting Shares of the Corporation voted at the Meeting, excluding shares held by “interested parties” and “control persons” of the Corporation.

The details of the Arrangement were discussed on PrefBlog in an earlier post.

DC.PR.A is tracked by HIMIPref™ but relegated to the Scraps index as none of the agencies rate the issue.

Standard & Poor’s has announced:

• •Power developer Atlantic Power Corp.’s key credit measures have continued to deteriorate. In addition, Atlantic Power has announced that, based on current projections, it may not be able to comply with the interest coverage ratio covenant in its senior revolving credit facility beginning in the third quarter of 2013.
• •We are placing the ‘BB-‘ corporate credit rating on Atlantic Power Corp. on CreditWatch with negative implications.
• •We expect to resolve the CreditWatch listing after the potential covenant violation issues are resolved. In the interim, we will also reassess our financial projections for the company given recent developments to ascertain whether near-term forecasted credit ratios remain commensurate with a ‘BB-‘ or lower rating. We expect to complete this review over the next two to three weeks.

…
To maintain ratings, we would expect average cash flow after debt service (CFADS) to debt and CFADS to interest coverage to be at least 17% and 2.4x, respectively. A downgrade could occur if the company’s CFADS to debt and CFADS to interest coverage drops below the aforementioned levels.

So S&P now rates these issues as P-4(low) [Watch-Negative].

In the company’s 13Q1 Earnings Release of May 8 they say:

Examples of such statements in this press release include, but are not limited, to statements with respect to the following:
…
compliance with the Company’s senior credit facility and the Company’s ability to obtain requested waivers and/or amendments to the senior credit facility;

but one of the subsequent developments was

Utilized portion of proceeds from the sale of the Florida Projects to fully repay $64 million of outstanding borrowings under the Company’s senior credit facility

The earnings release also noted:

• • 2013 annual guidance of $250 to $275 million in Project Adjusted EBITDA reaffirmed
• • 2013 annual Payout Ratio guidance of 65% to 75%, including cash flow from discontinued operations, reaffirmed

The section of concern is:

The Company, as previously indicated, still expects to have approximately $140 to $150 million of net cash available to invest in growth projects by mid-2013 after retaining at least $50 million of unrestricted cash and while preserving $210 to $225 million of access under its revolving credit facility. As more fully described in the Company’s quarterly report on Form 10-Q for the fiscal quarter ended March 31, 2013, the Company has initiated discussions with the lenders under its revolving credit facility to obtain a waiver of, or an amendment to, the revolving credit facility with respect to, among other things, compliance with certain ratios. The closing of the Gregory and Delta-Person asset sales in the third quarter of 2013 are expected to add further to the available net cash balance. Consistent with previous expectations, the Company plans to begin investing this cash in the second half of this year.

The 10Q for 2013Q1 states:

We must meet certain financial covenants under the terms of our senior credit facility, which are generally based on ratios as described in Note 9 to the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2012. As of May 6, 2013, we were in compliance with these ratios. After further review of our currently forecasted results for the remainder of the year, we anticipate that, it is likely we will not meet the covenant in our senior credit facility requiring that our ratio of Consolidated EBITDA to Consolidated Interest Expense (as described in the senior credit facility) exceeds 2.25, with respect to the quarter-end testing date for one or more of the remaining quarterly periods in the balance of the 2013 fiscal year. We are currently in discussions with our lenders to obtain a waiver of compliance with this ratio for the balance of the fiscal year and/or an amendment to the senior credit facility. We anticipate receiving a waiver for this possible default or an amendment to the applicable ratio, although no assurance can be given that we will be successful in this regard. In addition to securing such waiver and/or amendment, we plan to seek a broader amendment of our senior credit facility to take into account changes in the business development plans at Atlantic Power, which would also take into account the potential for a breach of our Leverage Ratio in early 2014, as more fully described in ‘‘Item 1A. Risk Factors’’, and intend to initiate discussions with our lenders in this regard. In the unlikely event that we’re not successful in obtaining such waiver or amendment, based on our available cash resources, we expect to have the ability to cash collateralize the outstanding letters of credit under the senior credit facility and terminate the senior credit facility prior to any default (which would eliminate such facility as a source of liquidity).

We believe that we will be able to generate sufficient amounts of cash and cash equivalents to maintain our operations and meet obligations as they become due for the next 12 months.

The preferred share issues were confirmed at Pfd-4 by DBRS last August, as reported on 2012-8-14.

Following the acquisition of APLP, ATP’s financial profile weakened significantly, predominately due to higher leverage and weaker cash flow ratios. ATP’s balance sheet is expected to continue to be pressured by the ongoing high level of capex associated with the Canadian Hills and Piedmont Green Power projects in 2012. In the medium to long term, APT’s financing strategy is to reduce the consolidated debt-to-capital ratio (currently at 67%) to 50%. Should the Company successfully execute its deleveraging strategy and build a strong track record of maintaining a good financial profile, this will have a positive credit implication.

Canadian Utilities has announced:

it has closed its previously announced public offering of Cumulative Redeemable Second Preferred Shares Series DD, by a syndicate of underwriters co-led by RBC Capital Markets and BMO Capital Markets, and including TD Securities Inc., Scotiabank, CIBC, Canaccord Genuity Corp., and GMP Securities L.P. Canadian Utilities Limited issued 9,000,000 Series DD Preferred Shares for gross proceeds of $225 million. The Series DD Preferred Shares will begin trading on the TSX today under the symbol CU.PR.G. The proceeds will be used for capital expenditures, to repay indebtedness and for other general corporate purposes.

CU.PR.G is a Straight Perpetual, 4.50%, announced April 30. It will be tracked by HIMIPref™ and has been assigned to the PerpetualPremium index.

The issue traded an impressive 1,121,508 shares today in a range of 25.00-19 before closing at 25.07-08, 115×5. The small premium is not surprising – it has a very close relation on the market in the form of CU.PR.F, which differs in terms only in that the redemption schedule differs by three months.

Vital statistics are:

In December, 2012, Dundee Corporation announced:

that its Board of Directors has approved, in principle, to proceed with a corporate restructuring, through a tax efficient plan of arrangement (the “Arrangement”) that will distribute to shareholders of the Corporation a 50% interest in Dundee Realty Corporation, the Corporation’s 70% owned real estate subsidiary. The Corporation itself will retain a 20% interest in Dundee Realty, with Mr. Michael Cooper, the President and Chief Executive Officer of Dundee Realty, retaining the remaining 30%.

The Corporation expects that the Arrangement, when completed, will result in the establishment of a new public company, with a capital structure that emulates that of Dundee Corporation. The Arrangement will be subject to regulatory, court and shareholder approvals, as well as the listing of the distributed company’s shares on the Toronto Stock Exchange.

The Arrangement as currently proposed provides that the share structure of the new company to be distributed will emulate that of Dundee Corporation, with the Class A and Class B shares as well as the First Preference Shares, Series 1 receiving their proportionate interest in the distributed company.

Upon completion of the Arrangement, Mr. Ned Goodman, President and Chief Executive Officer of the Corporation, will continue as Chairman of the Board of Directors, and Mr. Michael Cooper will continue as President and Chief Executive Officer. Mr. Goodman and Mr. Cooper will provide our shareholders with continuity in the quality of management of our real estate operations that they have experienced to date.

Dundee then announced on April 15:

that it has entered into an arrangement agreement (the “Arrangement Agreement”) with DREAM Limited, Dundee Realty Corporation (“Dundee Realty”) and Sweet Dream Corp., the 30% shareholder of Dundee Realty owned by Michael Cooper, in connection with the previously announced (December 14, 2012) corporate restructuring, through a tax efficient plan of arrangement (the “Arrangement”).

The Arrangement will result in the establishment of a new public real estate company, DREAM Limited, to which the Corporation will, directly or indirectly, transfer its 70% interest in the common shares and Class C preference shares (collectively, the “DRC Shares”) of Dundee Realty, the Corporation’s 70% owned real estate subsidiary. Following the completion of the Arrangement, Dundee is expected to own, directly or indirectly, Class A Subordinate Voting Shares of DREAM Limited representing approximately 28.57% of the total number of outstanding Class A Subordinate Voting and Class B Common Shares of DREAM Limited, and thereby retain an approximate indirect 20% interest in the DRC Shares. Pursuant to the Arrangement, holders of Dundee’s Class A Subordinate Voting Shares and Class B Common Shares will receive, directly or indirectly, their proportionate interest based on their Dundee share ownership in DREAM Limited. Holders of Dundee’s First Preference Shares, Series 1 will receive, for each share held, (i) a new Dundee preference share with an expected liquidation amount of $18.67 and an annual dividend of 5%, and (ii) a preference share of DREAM Limited with an expected liquidation amount of $6.33 and an increased annual dividend of 5.5%. Holders of the Corporation’s First Preference Shares, Series 2 are not participating in the Arrangement.

Dundee has now announced:

that it has agreed to amend the arrangement agreement (the “Arrangement Agreement”) with DREAM Limited, Dundee Realty Corporation (“Dundee Realty”) and Sweet Dream Corp., the 30% shareholder of Dundee Realty owned by Michael Cooper, in connection with the previously announced plan of arrangement (the “Arrangement”).

Following discussions with holders of Dundee’s First Preference Shares, Series 1, Dundee determined to revise the terms of the preference shares of DREAM Limited to reflect market terms for the security. Under the Arrangement, as amended, holders of Dundee’s First Preference Shares, Series 1 will receive, for each share held, (i) a new Dundee preference share with an expected liquidation amount of approximately $18.67 and an annual dividend of 5%, as previously announced, and (ii) a preference share of DREAM Limited with an expected liquidation amount of approximately $6.33 and an increased
dividend of 7.0% (increased from 5.5% previously announced). In addition, the preference shares of DREAM Limited will be redeemable, at the option of the holder, at any time after December 31, 2013 until December 31, 2014 at 102% of the liquidation amount, at any time after December 31, 2014 until December 31, 2015 at 101% of the liquidation amount and at any time after December 31, 2015 at 100% of the liquidation amount.

All other terms of the Arrangement remain the same as disclosed in Dundee’s management information circular dated April 16, 2013 mailed to shareholders.

Fortis Inc. has announced:

Redemption of Series “C” First Preference Shares

Fortis will redeem all of the issued and outstanding First Preference Shares, Series “C” of the Corporation in accordance with their terms on July 10, 2013. The redemption price will be $25.1456 in cash per share, being equal to $25.00 plus $0.1456, representing the amount of accrued and unpaid dividends per share for the period from and including June 1, 2013 to but excluding July 10, 2013. A notice of redemption providing additional details will be mailed to the registered holders of First Preference Shares, Series C on or about May 15, 2013. As previously announced, the regular quarterly preferential cash dividend of $0.340625 per share will be paid on June 1, 2013 to the holders of First Preference Shares, Series “C” of record as of the close of business on May 17, 2013.

FTS.PR.C was last mentioned on PrefBlog when it was added to TXPR effective 2013-4-22.

The Toronto Venture Exchange has announced:

BPO PROPERTIES LTD. (“BPP.PR.G”)(“BPP.PR.J”)(“BPP.PR.M”)
BULLETIN TYPE: Amalgamation, Delist
BULLETIN DATE: May 1, 2013
TSX Venture Tier 1 Company

The TSX Venture Exchange has accepted for filing documentation pursuant to a court approved plan of arrangement (the “Arrangement”). Pursuant to the Arrangement, the Series G, J and M Preferred Shares of BPO Properties Ltd. will be exchanged for Class AAA Preference Shares of Brookfield Office Properties Inc.

Effective at the close of business, Wednesday, May 1, 2013, the Preferred Shares (BPP.PR.G, BPP.PR.J and BPP.PR.M) of the Company will be delisted from TSX Venture Exchange. At the open on May 2, 2013 on the Toronto Stock Exchange, Brookfield Office Properties Inc. will list Series V, W and Y Class AAA Preference Shares. For further information please refer to the Company’s information circular dated March 28, 2013 and the Company’s news release dated March 22, 2013.

Accordingly, DBRS has discontinued the rating:

DBRS has today discontinued the Issuer Rating and Cumulative Redeemable Preferred Shares rating of BPO Properties Ltd. (BPO or the Company). This action follows the successful completion of the previously announced transaction involving the exchange of the Company’s preferred shares for new Class AAA preference shares of Brookfield Office Properties Inc. As such, BPO no longer has any outstanding public securities.

And on May 2 they started trading as advertised. As previously reported:

Brookfield Renewable Energy Partners has announced:

the completion of its previously announced 5% perpetual Class A Preferred Shares, Series 6 (“Preferred Shares”) bought deal issue in the amount of CDN$175,000,000. Brookfield Renewable issued, through a wholly-owned subsidiary, 7,000,000 Preferred Shares at a price of CDN$25.00 per share, for total gross proceeds of CDN$175,000,000.

The offering was underwritten by a syndicate led by Scotiabank, CIBC, RBC Capital Markets and TD Securities Inc.

The Series 6 Preferred Shares will commence trading on the Toronto Stock Exchange this morning under the ticker symbol BRF.PR.F.

BRF.PR.F is a Straight Perpetual, 5.00% announced April 23. The fact that 7-million shares were issued means that the greenshoe option was exercised in full. The issue will be tracked by HIMIPref™ but relegated to the Scraps index on credit concerns.

The issue traded 289,520 shares today in a range of 24.85-94 before closing at 24.94-95, 10×151. Vital statistics are:

Sentry Investments has announced:

TORONTO, ONTARIO–(Marketwired – April 22, 2013) – The Board of Trustees (the “Trustees”) of Diversified Preferred Share Trust (the “Trust”) announces that, at the reconvened special meeting held on April 22, 2013, unitholders approved the restructuring of the Trust into an open-end mutual fund to be administered in compliance with National Instrument 81-102 – Mutual Funds, as well as other matters ancillary thereto, including a change in the Trust’s investment objective (the “Restructuring”). Full details regarding the proposed Restructuring are set out in the management information circular dated March 12, 2013 (the “Information Circular”) that was sent to unitholders of record on March 19, 2013. The following events, as disclosed in the Information Circular, will occur on or about the dates specified below:

Item		Date(s)
Notice period in respect of initial redemption right (the “Notice Period”)		Beginning April 23, 2013 and ending May 3, 2013
Initial redemption date (the “Valuation Date”)		May 10, 2013
Initial redemption payment date (the “Redemption Payment Date”)		May 15, 2013
Delisting the Trust’s units from the TSX		May 10, 2013
Effective date of Restructuring		May 24, 2013

DBRS comments:

DBRS has today placed the stability rating of STA-2 (low) for the retractable units (the Units) issued by Diversified Preferred Share Trust (the Trust) Under Review with Negative Implications following the Trust’s announcement that unitholders had approved the restructuring of the Trust into an open-ended mutual fund. The restructuring is expected to close on May 24, 2013.

The Trust is currently passively managed by Sentry Investments (the Administrator) and invests in investment-grade preferred shares and preferred securities that are listed on the Toronto Stock Exchange and meet a specific set of requirements (please refer to the latest rating report for the Trust). The limited flexibility in investments is considered a positive rating factor by DBRS and is consistent with stability ratings in the STA-1 and STA-2 range.

On February 15, 2013, the board of trustees of the Trust proposed a restructuring of the Trust that involved, among other things, changing the investment objectives and restrictions of the Trust and the elimination of the administration fee paid by the trust to the Administrator until June 1, 2016. While the reduction in expenses from removing the administration fee benefits income stability, the looser investment restrictions would allow the Trust to invest in a much broader range of assets (including fixed-income securities, equity securities, securities of other mutual funds (including those managed by the Administrator), derivatives, leveraged and unlevered exchange-traded funds and private placements) and gives the Trust the ability to engage in repurchase transactions and short selling. Furthermore, the Trust may invest up to all of its assets in foreign securities and is not expected to hedge its foreign currency exposure initially.

This significant increase in investment flexibility gives the Administrator considerable amounts of discretion as to what the Trust may invest in and is viewed as an increased risk to the stability of the stated distribution to holders of the Units of the Trust. As a result, the Units are being placed Under Review with Negative Implications.

BPO Properties Limited has announced:

that its preferred shareholders have approved the previously announced proposal to exchange its existing preferred shares for new class AAA preference shares of Brookfield Office Properties Inc. (“Brookfield Office Properties”) with substantially the same terms and conditions. Preferred shareholders voted in favour of the proposal at a meeting today at Brookfield Place in Toronto by a margin of 99.04%. BPO Properties will now seek final court approval from the Ontario Superior Court of Justice. It is anticipated that the transaction will close on Monday, April 29.

On closing of the transaction, holders of preferred shares of BPO Properties will receive one class AAA preference share of Brookfield Office Properties for each preferred share of BPO Properties held. The class AAA preference shares of Brookfield Office Properties will have substantially the same terms and conditions as the preferred shares of BPO Properties that are exchanged. In particular, dividend rates will remain unchanged.

Currently, the series G, J and M preferred shares of BPO Properties are listed on the TSX Venture Exchange (“TSXV”). The class AAA preference shares, series V, W and Y of Brookfield Office Properties will replace the series G, J and M preferred shares and will begin trading on the Toronto Stock Exchange under the stock symbols “BPO.PR.X”, “BPO.PR.W” and “BPO.PR.Y”, respectively, on or about Wednesday, May 1. In the interim, from market open to market close on April 30, the series G, J and M preferred shares of BPO Properties will continue to trade on the TSXV under the symbols “BPP.PR.G”, “BPP.PR.J” and “BPP.PR.M”, respectively, as proxy shares – representing an entitlement to the series V, W and Y shares of Brookfield Office Properties, respectively.

The proposal to exchange these issues was reported on PrefBlog. All the issues have been, or will be, tracked by HIMIPref™ but relegated to the Scraps index on credit concerns.

Morgan Meighen & Associates has announced:

Canadian General Investments, Limited (the “Company”) announced today that it has provided notice to holders of its $75,000,000 4.65% Cumulative Redeemable Class A Preference Shares, Series 2 (the “Series 2 Shares”) that in accordance with the terms of the Series 2 Shares it will redeem all of the issued and outstanding Series 2 Shares on May 29, 2013, for a price of $25.00 per Series 2 Share plus all accrued and unpaid dividends (from and including the last scheduled dividend payment date, March 15, 2013, to, but excluding, the date of redemption, and being in the amount of $0.23887 per share). This redemption will initially be funded by a short-term loan from a Canadian chartered bank.

CGI.PR.B was last mentioned on PrefBlog when it was confirmed at Pfd-1(low) by DBRS. CGI.PR.B has been tracked by HIMIPref™ but has been relegated to the Scraps index on credit concerns.