Category: Issue Comments

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.

As reported on PrefBlog, DBRS confirmed BAM, but changed the trend to negative on March 5. Apparently, they found the experience so exciting that they have done it again:

DBRS has today confirmed the ratings of Brookfield Asset Management Inc. (BAM or the Company). The ratings pertain to BAM at the corporate level and remain on a Negative trend since the last trend change on March 5, 2013. The trend change followed the downgrade of the Issuer Rating of BAM’s subsidiary, Brookfield Office Properties Inc. (BOP), to BBB from BBB (high) and reflects that BAM’s ratings are under pressure because of BOP’s weaker credit quality, as well as the sustained high debt level at BAM’s corporate level. The downgrade of BOP’s rating reflects increased uncertainty due to material near-term maturing tenancy agreements, increased leverage and lower cash flow coverage metrics. As such, DBRS believes that the quality of cash flows remitted to BAM from this material subsidiary, which is available after BOP satisfied its own debt servicing and operating needs, is also weakened.
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BAM’s corporate-level cash flow metrics for the full-year 2012 were close to the previously set targets for the ratings. Funds from operations (FFO)-to-total debt in 2012 was 28% compared to 30% in 2010 (23% and 26%, respectively, after adjusting in accordance with DBRS Criteria: Preferred Share and Hybrid Criteria for Corporate Issuers (Excluding Financial Institutions), published on November 5, 2012) while FFO interest coverage was 4.9x in 2012 compared to 5.1x in 2010 (4.4x and 5.0x, respectively, after adjusting for the same).

As consistent with the Negative trend, BAM will be challenged to improve the overall quality of its investments over time through increasing the proportion of investments with strong BBB or better credit quality and more conservative use of leverage at the operating-company level. With weaker quality of cash flow from BOP and increasing leverage (and therefore debt servicing requirements) in its key subsidiaries in recent years, DBRS also believes that the cash flow metrics at BAM’s corporate level will need to be raised in order to maintain the necessary cushion for the ratings. Specifically, DBRS expects BAM to further improve its corporate-level FFO-to-debt toward 35% (or about 30% on an adjusted basis) and FFO interest coverage toward 5.5x (or about 5.0x on an adjusted basis), and to maintain at these levels on a sustained basis.

DBRS will monitor the progress during the course of 2013 and could consider a one-notch downgrade of BAM’s ratings if it becomes evident that the Company will be unable to meet any of the above expectations and to remedy the shortfall within an acceptable timeframe.

The downgrade of Brookfield Office Properties was also reported on PrefBlog.

A downgrade of BAM would also have an immediate effect on the SplitShares issued by BAM Split Corp.: BNA.PR.B, BNA.PR.C, BNA.PR.D and BNA.PR.E.

It also seems likely that a BAM downgrade would involve collateral or related damage to the ratings of Brookfield Properties Corp (BPO.PR.F, BPO.PR.H, BPO.PR.J, BPO.PR.K, BPO.PR.L, BPO.PR.N, BPO.PR.P, BPO.PR.R, BPO.PR.T), Brookfield Office Properties (BPP.PR.G, BPP.PR.J, BPP.PR.M), Brookfield Renewable Power Preferred Equity Inc (BRF.PR.A, BRF.PR.C, BRF.PR.E) and Brookfield Investments Corporation (BRN.PR.A).

Brookfield Asset Management is the proud issuer of:

FixedResets BAM.PF.A, BAM.PF.B, BAM.PR.P, BAM.PR.R, BAM.PR.T, BAM.PR.X, BAM.PR.Z
Floaters BAM.PR.B, BAM.PR.C, BAM.PR.K
RatchetRate BAM.PR.E
FixedFloater BAM.PR.G
OperatingRetractible BAM.PR.J, BAM.PR.O
Straight Perpetual BAM.PR.M, BAM.PR.N, BAM.PF.C

BNS.PR.A is the new FloatingReset that resulted from a partial exchange of BNS.PR.P on the latter issue’s first Exchange Date.

BNS.PR.A is the first FloatingReset to exist, paying 205bp over 3-Month Canada Treasury Bills. It will be tracked by HIMIPref™ and will be assigned to the FixedReset index until there are ten Floating Resets (of investment grade and non-derisory volume), at which point a new FloatingReset index will be created.

Vital statistics are:

On 2013-12-31, DBRS placed BRF on Review-Developing:

DBRS has today placed Brookfield Renewable Energy Partners LP’s (BREP or the Company) Issuer Rating and related ratings Under Review with Developing Implications. This rating action follows the announcement of the Company’s acquisition of White Pine Hydro Investments, LLC (White Pine or the Portfolio) from a subsidiary of NextEra Energy Resources, LLC (the Acquisition). The total enterprise value of the Acquisition is approximately $760 million (including $700 million of non-recourse debt) and is expected to close in the first quarter of 2013, subject to various regulatory approvals. The rating action largely reflects some uncertainties associated with a timely and prudent financing strategy.
…
The Company intends to initially finance the total acquisition price with cash on hand ($252 million as at September 30, 2012) and credit facilities ($854 million available as at September 30, 2012). DBRS expects the Company to refinance the holding company-level credit facility with a prudent mix of non-recourse project level debt, equity from BREP and contributions from institutional partners in the first half of 2013. The Company has a deconsolidated debt-to-capital ratio of 19% as of June 30, 2012. Should BREP’s expected financing strategy deviate from the aforementioned timeframe and deconsolidated leverage increase to above 20%, there could be negative credit implications.

Today, the review was resolved and the company confirmed with a stable trend:

DBRS has today removed Brookfield Renewable Energy Partners LP’s (BREP or the Company) ratings from Under Review with Developing Implications. DBRS has also confirmed the Issuer Rating and Senior Unsecured Debentures and Notes at BBB (high) and the Class A Preference Shares at Pfd-3 (high), all with Stable trends. With the establishment of non-recourse bridge financing for the acquisition of White Pine Hydro Investments, LLC (the Acquisition; White Pine), the planned issuance of preferred shares on a bought deal basis and expected equity injection from institutional partners, DBRS is comfortable with the Company’s funding strategy, which includes appropriate measures to maintain a reasonable financial profile while executing its growth strategy.
…
Following the completion of the Acquisition, the Company has committed to tendering the $700 million of existing debt at White Pine with $350 million of non-recourse bridge financing and $350 million of drawings from BREP’s credit facility and available cash. Concurrently, the Company plans to issue an additional $125 million (up to $175 million) of preferred equity to repay drawings on BREP’s credit facility. The Company also expects to receive equity funding from its institutional partners such that there will be no material incremental drawings on BREP’s credit facility relating to the tendering of the existing debt at White Pine.

Based on BREP’s financing plan, DBRS conducted a pro forma analysis with a financing plan of $350 million non-recourse bridge financing, equity from institutional partners and $125 million of preferred equity issuance.

Based on DBRS’s pro forma calculations, the Company’s credit metrics would be in line with its current rating category with (1) deconsolidated debt-to-capital ratio at approximately 20%, (2) deconsolidated cash flow-to-deconsolidated debt ratio at approximately 18% and (3) deconsolidated cash flow-to-deconsolidated interest coverage at approximately 4.9 times.

BRF is the proud issuer of BRF.PR.A, BRF.PR.C and BRF.PR.E; another issue was announced earlier today. Due to the corporate structure, BAM, BPO, BPP, BNA, BRN and BRF should be considered as the same name for issuer concentration calculation purposes.