Category: Issue Comments

BCE announced earlier:

Beginning on June 17, 2011 and ending on July 22, 2011, holders of Series AI Preferred Shares will have the right to choose one of the following options with regards to their shares:

1. To retain any or all of their Series AI Preferred Shares and continue to receive a fixed quarterly dividend; or
2. To convert, on a one-for-one basis, any or all of their Series AI Preferred Shares into BCE Inc. Cumulative Redeemable First Preferred Shares, Series AJ (the “Series AJ Preferred Shares”) and receive a floating monthly dividend.

Effective August 1, 2011, the fixed dividend rate for the Series AI Preferred Shares will be set for a five-year period as explained in more detail in paragraph 5 of the attached Notice of Conversion Privilege. Should you wish to continue receiving a fixed quarterly dividend for the five-year period beginning August 1, 2011, you do not need to take any action with respect to this notice. However, should you wish to receive a floating monthly dividend, you must elect to convert your Series AI Preferred Shares into Series AJ Preferred Shares as explained in more detail in the attached Notice of Conversion Privilege.

Today BCE announced the chosen rate:

BCE Inc. will, on August 1, 2011, continue to have Cumulative Redeemable First Preferred Shares, Series AI outstanding if, following the end of the conversion period on July 22, 2011, BCE Inc. determines that at least two million Series AI Preferred Shares would remain outstanding. In such a case, as of August 1, 2011, the Series AI Preferred Shares will pay, on a quarterly basis, as and when declared by the Board of Directors of BCE Inc., a fixed cash dividend for the following five years that will be based on an annual fixed dividend rate equal to 4.15%.

If converted, the symbol for the Ratchet Rate issue will be BCE.PR.J, which does not currently exist.

S Split Corp. has released its Annual Report to December 31, 2010.

Figures of interest are:

MER: 2.26% of the whole unit value

Average Asset Value: $82-million

Underlying Portfolio Yield: When fully invested will be equal to BNS common: 3.63%

Income Coverage: 0.5:1 – they have often kept a lot of cash on the books.

PrefBlog’s awesome power has been illustrated yet again, as Faircourt Asset Management, the Manager of Faircourt Split Trust , has announced:

that $13,996,390 in aggregate principal amount of the Trust’s outstanding 6.25% Preferred Securities (the “Preferred Securities”) will be redeemed on July 22, 2011 (the “Redemption Payment Date”). The record date of the Preferred Securities partial redemption is July 15, 2011.

Proceeds from the Preferred Securities redemption will amount to $10.0377 for each $10.00 principal amount of Securities, being equal to the aggregate of (i) $10.00 (the “Redemption Price”), and (ii) all accrued and unpaid interest hereon to but excluding the Redemption Payment Date (collectively, the “Total Redemption Price”).

The interest upon the principal amount of Preferred Securities called for redemption shall cease to be payable from and after the Redemption Payment Date, unless payment of the Total Redemption Price shall not be made on presentation for surrender of such Preferred Securities on or after the Redemption Payment Date or prior to the setting aside of the Total Redemption Price pursuant to the Indenture.

Securities will be redeemed pro rata from each beneficial holder of Securities pursuant to the procedures of CDS Clearing and Depository Services Inc. Beneficial holders of Preferred Securities should contact their broker with any questions regarding the redemption.

The size of the preferred share redemption exactly counterbalances the unmatched Capital Unit retraction discussed on PrefBlog in the post FCS.PR.B Credit Quality to Deteriorate.

FCS.PR.B is tracked by HIMIPref™, but is relegated to the Scraps index on credit concerns.

Scotia Managed Companies, the sponsor of BNS Split Corp. II has announced:

the completion of its warrant offering.

The gross proceeds from the exercise of the warrants totaled $63.0 million, representing 100% of the maximum available subscription amount.

The net proceeds from the exercise of the warrants will be invested in accordance with the investment objectives of the Company.

BNS Split Corp. II is a mutual fund corporation created to hold a portfolio of common shares of The Bank of Nova Scotia. The Capital Shares and Preferred Shares of BNS Split Corp. II are listed for trading on The Toronto Stock Exchange under the symbols BSC and BSC.PR.B, respectively.

This doubles the size of the issue, meaning that there are now about 2.6-million shares outstanding with a par value of 18.85. This is sufficient to provide meaningful liquidity – not great, but meaningful – and the issue has been added to HIMIPref™ effective on the date of original issue, 2010-9-22. Purists will object to the backdating on the grounds that this increases selection bias in the HIMIPref™ universe; purists are invited to go take a running jump.

Issue information has been taken from the prospectus of the original issue.

BSC.PR.B was last mentioned on PrefBlog when I reported the imminent expiration of the warrants. BSC.PR.B is currently included in the Scraps index.

BCE Inc. has announced:

that it has closed its previously announced public offering of Cumulative Redeemable First Preferred Shares, Series AK (series AK preferred shares), by a syndicate of underwriters led by CIBC World Markets Inc., RBC Dominion Securities Inc. and Scotia Capital Inc. As a result of the underwriters exercising in full their option to purchase an additional 1,800,000 series AK preferred shares, BCE issued 13,800,000 series AK preferred shares for gross proceeds of $345 million. The series AK preferred shares will begin trading on the TSX today under the symbol BCE.PR.K.

The series AK preferred shares will pay on a quarterly basis (with the first quarterly dividend to be paid September 30, 2011), for the initial fixed rate period ending December 30, 2016, as and when declared by the Board of Directors of BCE, a fixed cash dividend based on an annual fixed dividend rate of 4.15%. The dividend rate will be reset on December 31, 2016 and every five years thereafter at a rate equal to the 5-year Government of Canada bond yield plus 1.88%. The series AK preferred shares will be redeemable by the issuer on December 31, 2016 and on December 31 every five years thereafter, in accordance with their terms.

Holders of the series AK preferred shares will have the right, at their option, to convert their shares into Cumulative Redeemable First Preferred Shares, Series AL, (series AL preferred shares) subject to certain conditions, on December 31, 2016 and on December 31 every five years thereafter. Holders of the series AL preferred shares will be entitled to receive quarterly floating adjustable cash dividends as and when declared by the Board of Directors of BCE, at a rate equal to the three-month Government of Canada Treasury Bill yield plus 1.88%.

The net proceeds of this offering will be used for general corporate purposes.

BCE.PR.K is a FixedReset, 4.15%+188, announced June 20. It is tracked by HIMIPref™, but has been relegated to the Scraps index on credit concerns.

BCE.PR.K traded 558,795 shares today in a range of 24.74-99 before closing at 24.98-99, 8×17. Vital statisics are:

Faircourt Asset Management has announced:

that 164,456 Combined Units (consisting of one Trust Unit and one Preferred Security) and 1,399,639 Trust Units (without matching Preferred Securities) were submitted for redemption on May 31, 2011. Securityholders who tendered Combined Units for redemption will be entitled to receive $17.3310 per Combined Unit, which is equal to $7.3173, being the Net Asset Value per Trust Unit calculated using a three day volume weighted average price for exchange-traded securities held by the Trust, determined as of June 30, 2011 less costs of funding the redemption, including commissions, plus the $10.00 principal amount of the Preferred Security, plus all accrued and unpaid interest thereon to but excluding July 8, 2011 (the “Payment Date”). Securityholders who submitted unmatched Trust Units will receive $7.3173 per Trust Unit. Payment in respect of the redemptions of Combined Units and unmatched Trust Units will be made in full on the Payment Date.

The Manager also announced that effective June 30, 2011, NAV per Trust Unit has been reduced by $0.21 as a result of a corporate action involving one of the Trust’s investments having been improperly reflected in the NAV.

Faircourt Split Trust is an odd beast among Split Share Corporations because the number of preferred shares outstanding is not set equal to the number of capital shares. The unmatched retraction of 1,399,639 Trust Units represents over one-quarter of the 5,302,037 Trust Units outstanding on 2010-12-31.

The Asset Coverage on 2010-12-31 was about 1.57:1; applying the May 31 retraction on a pro-forma basis as of that date results in a pro-forma Asset Coverage of about 1.42:1.

FCS.PR.B was last mentioned on PrefBlog when it was exchanged from FCS.PR.A. FCS.PR.B is tracked by HIMIPref™, but is relegated to the Scraps index on credit concerns.

Lifeco Split Corporation, sponsored by Scotia Managed Companies, has announced:

that it has called 34,146 Preferred Shares for cash redemption on July 29, 2011 (in accordance with the Company’s Articles) representing approximately 11.435% of the outstanding Preferred Shares as a result of the special annual retraction of 68,292 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 July 28, 2011 will have approximately 11.435% of their Preferred Shares redeemed. The redemption price for the Preferred Shares will be $36.84 per share.

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 July 29, 2011.

Payment of the amount due to holders of Preferred Shares will be made by the Company on July 29, 2011. From and after July 29, 2011 the holders of Preferred Shares that have been called for redemption will not be entitled to dividends or to exercise any right in respect of such shares except to receive the amount due on redemption.

Lifeco Split Corporation Inc. is a mutual fund corporation created to hold a portfolio of common shares of selected publicly listed Canadian life insurance companies. Capital Shares and Preferred Shares of Lifeco Split Corporation Inc. are listed for trading on The Toronto Stock Exchange under the symbols LSC and LSC.PR.C respectively.

LSC.PR.C was last mentioned on PrefBlog when there was a partial redemption and change of terms last year. LSC.PR.C is not tracked by HIMIPref™.

Mulvihill Asset Management has announced:

In connection with the special retraction right granted to shareholders pursuant to the extension of the term of the Company approved by shareholders on May 31, 2011, the Company is announcing a consolidation of the Class A shares effective the opening of trading on July 4, 2011. The consolidation will ensure that an equal number of Class A shares and Preferred shares are outstanding subsequent to the special retraction. Each Class A shareholder will receive 0.562426082 Class A shares for each Class A share held. The total value of a shareholder’s investment will not change, however, the number of Class A shares reflected in the shareholder’s account will decline and the net asset value per share will increase proportionately. Investors are advised that the CUSIP number will change to 98146P301. No fractional shares will be issued and shareholders are not required to take any action for the consolidation to be effective.

Given that the Whole Unit NAV on June 23 was only 10.58, even the retraction of nearly half of the preferred shares and consolidation of the capital units doesn’t help much: asset coverage will still be only about 1.1:1 following the reorganization.

WFS.PR.A was last discussed on PrefBlog in the post WFS.PR.A Term Extension Approved. WFS.PR.A is tracked by HIMIPref™ but is relegated to the Scraps index on credit concerns.

Capstone Infrastructure Corporation has announced:

that it has closed its previously announced offering of 3,000,000 Cumulative 5-Year Rate Reset Preferred Shares, Series A (the “Series A Shares”) at a price of $25.00 per Series A Share for aggregate gross proceeds of $75,000,000.

The Series A Shares were sold to a syndicate of underwriters co-led by TD Securities Inc., Macquarie Capital Markets Canada Ltd. and RBC Capital Markets on a bought deal basis. The underwriters are entitled, pursuant to an over-allotment option exercisable in whole or in part at any time up until 30 days after the closing date, to purchase an additional 450,000 Series A Shares at $25.00 per Series A Share.

The Series A Shares will be listed and posted for trading on the Toronto Stock Exchange under the symbol “CSE.PR.A”. The net proceeds of the offering will be used to fund the Corporation’s final equity payment for the construction of the Amherstburg solar power facility, to fund future potential acquisitions and for general corporate purposes.

The Corporation also announced today that the Amherstburg solar power facility has achieved commercial operation under its Renewable Energy Standard Offer Program contract with the Ontario Power Authority and is in the process of finalizing acceptance testing, which is expected to be completed in the first week of July.

CSE.PR.A is a 5.00%+271 FixedReset announced June 13. The issue traded 13,150 shares in a range of 24.00-75 before closing at 24.00-20, 5×10.

Vital statistics are:

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

This is late, but Mulvihill Capital Management has announced:

that holders of Class A Shares and holders of Preferred Shares of the Fund have approved a proposal to extend the term of the Fund for seven years beyond its scheduled termination date of June 30, 2011, and for automatic successive seven-year terms after June 30, 2018.

As a result, holders of Class A Shares will benefit from ongoing leveraged exposure to a high-quality portfolio consisting principally of common equity securities selected from the ten largest (by market capitalization) financial services companies in each of Canada, the United States and the rest of the world. Holders of Preferred Shares will continue to benefit from fixed cumulative preferential quarterly cash dividends in the amount of $0.13125 per Preferred Share representing a yield of 5.25% per annum on the original issue price of $10.00 per Preferred Share and an attractive seven-year term.

As part of the extension of the term of the Fund, the Fund will also make other changes, including: (i) provide a special redemption right to enable holders of Class A Shares and Preferred Shares to retract their shares on June 30, 2011 on the same terms that would have applied had the Fund redeemed all Class A Shares and Preferred Shares in accordance with the existing terms of such shares; (ii) change the monthly retraction prices for the Class A Shares and the Preferred Shares such that monthly retraction prices are calculated by reference to market price in addition to net asset value and to change the notice period and payment period for the exercise of such rights and the payment of the retraction amount relating thereto; and (iii) consolidate the Class A Shares or redeem the Preferred Shares on a pro rata basis, as the case may be, in order to maintain the same number of Class A Shares and Preferred Shares outstanding.

Shareholders who exercise the special redemption right will receive the amount which they would have received had the June 30, 2011 termination date not been extended. Payments for shares tendered pursuant to the Special Retraction Right will be made no later than 10 business days after June 30, 2011, provided that such shares have been surrendered for redemption on or prior to 5:00 p.m. (Toronto time) on June 17, 2011. The retraction price per Class A Share to be received by a holder of Class A Shares under the Special Retraction Right will be equal to the greater of (a) the NAV per Unit on the Special Retraction Date minus $10.00 and (b) nil. The retraction price per Preferred Share to be received by a holder of Preferred Shares under the Special Retraction Right will be equal to the lesser of: (a) $10.00; and (b) the NAV of the Fund divided by the number of Preferred Shares outstanding on the Special Retraction Date. Any declared and unpaid distributions payable on or before the Special Retraction Date in respect of Class A Shares or Preferred Shares tendered for retraction on the Special Retraction Date will also be paid on the retraction payment date.

This follows publication of the notice of meeting and information circular

The proposal to extend term was discussed on PrefBlog. WFS.PR.A is tracked by HIMIPref™ but is relegated to the Scraps index on credit concerns.