Category: Issue Comments

These are total returns, with dividends presumed to have been reinvested at the bid price on the ex-date. The list has been restricted to issues in the HIMIPref™ indices.

Power Financial Corp. has announced:

the successful completion and closing of an offering of 11,200,000 4.40% Non-Cumulative 5-Year Rate Reset First Preferred Shares, Series P (the “Series P Shares”) priced at $25.00 per share to raise gross proceeds of $280 million.

The issue was bought by an underwriting group co-led by BMO Capital Markets, RBC Capital Markets and Scotia Capital Inc. Following the successful sale of the initially announced 8,000,000 Series P Shares, the underwriters exercised an option to purchase an additional 3,200,000 Series P Shares.

The Series P Shares will be listed and posted for trading on the Toronto Stock Exchange under the symbol “PWF.PR.P”. Proceeds from the issue will be used to supplement Power Financial’s financial resources and for general corporate purposes.

PWF.PR.P is a FixedReset, 4.40%+160, announced June 17. It traded 563,942 shares today in a range of 24.85-02 before closing at 25.00-14.

The greenshoe was for 4-million shares, so 80% was exercised.

Given the Power Group’s reputation for extremely tight pricing of their new preferred issues, I can bet the CFO has already received a sternly worded memo about leaving too much money on the table!

Vital statistics are:

PWF.PR.P is tracked by HIMIPref™ and has been assigned to the FixedReset index.

TransCanada Corp. has announced:

that it has completed its public offering of cumulative redeemable first preferred shares, series 5 (the “Series 5 Preferred Shares”). As the underwriters fully exercised their option to acquire an additional two million Series 5 Preferred Shares, the size of the offering increased to a total of 14 million shares resulting in gross proceeds of $350 million.

The offering was first announced on June 17, 2010 when TransCanada entered into an agreement with a syndicate of underwriters in Canada led by Scotia Capital Inc., RBC Capital Markets, and BMO Capital Markets.

The net proceeds of the offering will be used to partially fund capital projects, for general corporate purposes and to reduce short term indebtedness of TransCanada and its affiliates, which short term indebtedness was used to fund TransCanada’s capital program and for general corporate purposes.

TRP.PR.C traded 567,818 shares today in a range of 24.75-90 before closing at 24.83-88. This issue is a FixedReset, 4.40%+154, announced June 17.

Vital statistics are:

TRP.PR.C is tracked by HIMIPref™ and has been added to the FixedReset index.

Faircourt Asset Management has announced:

that approximately 1 million Warrants outstanding have been exercised at an exercise price of $4.00 per Trust Unit for aggregate gross proceeds raised approximating $4 million. Warrants not exercised expired on June 25th, 2010.

There were 4.9-million outstanding, so take-up was just a little over 20%.

FIG.PR.A was last mentioned on PrefBlog when the mass retraction of 6.4-million units was announced.

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

Power Financial Corporation has announced:

that it intends to redeem all $150 million of its outstanding 4.70% Non-Cumulative First Preferred Shares, Series J on July 30, 2010.

In accordance with the terms of the Series J Shares, the redemption price will be $25.50 for each Series J share plus an amount equal to all declared and unpaid dividends, net of any tax required to be withheld by the Corporation.

A notice of the redemption of the Series J Shares will be provided in accordance with the rights, privileges and conditions attached to the Series J Shares.

PWF.PR.J commenced trading in March, 2003, and was scheduled to become callable at par commencing 2012-4-30. It was last mentioned on PrefBlog in early 2007, after GWO bought Putnam.

PWF.PR.J is a member of the rapidly shrinking Operating Retractible index and closed last night at 25.80-85, with a negative Yield-to-Worst.

Financial 15 Split Corp. II has announced:

There will not be a distribution paid to Financial 15 II Class A Shares for June 30, 2010 as per the Prospectus which states no regular monthly dividends or other distributions will be paid on the Class A Shares in any month as long as the net asset value per unit is equal to or less than $15.00. The net asset value as of June 15, 2010 was $14.47.

FFN.PR.A was last mentioned on PrefBlog when the capital unit dividend was suspended in February (it was reinstated in March). FFN.PR.A is tracked by HIMIPref™, but is relegated to the Scraps index on credit concerns.

In the press release announcing their new FixedReset 4.40%+160 issue, Power Financial announced:

The Corporation intends to redeem all of its $150 million First Preferred Shares, Series C on October 31, 2010.

The redemption price will be $25.40.

PWF.PR.D closed last night at 25.70-75 to yield 3.97-53% until this redemption.

PWF.PR.D commenced trading 1997-10-17, is tracked by HIMIPref™ and is a member of the Operating Retractible sub-index … there goes another one!

Loblaw Companies has announced that it:

has agreed to issue $350 million principal amount of Medium Term Notes, Series 2-B pursuant to its Medium Term Notes, Series 2 program. The notes are to be offered through an agency syndicate led by CIBC World Markets Inc. and RBC Dominion Securities Inc. and are expected to be issued on June 18, 2010. The notes will pay a fixed rate of 5.22% per annum until maturity on June 18, 2020. The notes will be unsecured obligations of the Company and will rank equally with all other unsecured indebtedness of the Company that has not been subordinated. The net proceeds of the offering will be used to pre-fund the Company’s $350 million of indebtedness maturing in January 2011 and for general corporate purposes.

L.PR.A, an Operating Retractible issued in June 2008, closed today at 26.90-96 to yield 4.48% to its 2015-7-30 softMaturity. On an interest-equivalent basis, these shares yield more than 100bp over the notes and have only a five year maturity (there is the potential for earlier calls).

DBRS has announced that it has changed the ratings trend on CM from negative to stable. The so-called press release is not available to the public.

Investment Executive reports:

DBRS says that the move to a stable trend reflects its view that “actions taken so far by CIBC to reduce its exposures in the structured credit runoff business should help to limit the losses on both earnings and capital.” It says that it expects the bank to continue to proactively reduce its structured credit runoff portfolio exposures.
…
DBRS adds that the bank has also taken actions to improve risk management, including changing senior management, increasing the depth of its senior risk management team, and revamping the risk management process and procedures. It allows that while it is difficult to assess the effectiveness of these changes, “so far earnings from core businesses remain within our expectations, given weak credit markets in Canada.”

“Nevertheless, any material weaknesses in risk management that affect the consistency or sustainability of earnings will have a negative impact on CIBC’s ratings,” it stresses

CM has a large number of preferred shares issues outstanding: CM.PR.A (OpRet); CM.PR.D, CM.PR.E, CM.PR.G, CM.PR.H, CM.PR.I, CM.PR.J (PerpetualDiscount); CM.PR.K, CM.PR.L, CM.PR.M (FixedReset); CM.PR.P (PerpetualDiscount) and CM.PR.R (OpRet).

The last general news about CM was the post on the preferred DRIP into discounted common. All CM preferred issues are tracked by HIMIPref™.

Yellow Pages Income Fund has announced:

that its subsidiary, Yellow Media Inc. (the “Issuer”), will be issuing $200 million aggregate principal amount of 6.25% convertible unsecured subordinated debentures (the “Convertible Debentures”) on a bought deal basis. The Convertible Debentures pay interest semi-annually on April 1 and October 1 of each year commencing October 1, 2010. The Convertible Debentures have a maturity date of October 1, 2017 and will be convertible, at the option of the holder, for trust units (“Units”) of the Fund at an exchange price of $8.00 per Unit.

The Issuer has also granted the underwriters the option to purchase up to $30 million principal amount of additional Convertible Debentures at a price of $1,000 per Convertible Debenture (plus accrued interest from the initial closing of the offering to the closing of the over-allotment option) to cover over-allotments, exercisable in whole or in part anytime up to 30 days following closing of the offering.

Net proceeds resulting from the sale of the Convertible Debentures of the Issuer shall be used by the Issuer to repay indebtedness, including under the Issuer’s commercial paper program and to fund the redemption of the Issuer’s outstanding 5.50% Exchangeable Unsecured Subordinated Debentures, and for general corporate purposes.

Pursuant to the Fund’s previously announced plan of arrangement under the Canada Business Corporations Act, the Fund’s income trust structure will be converted into a corporate structure. As a result, the Convertible Debentures will, without the requirement for the consent of any holders of Convertible Debentures, become debentures of the successor public corporation on the effective date of the arrangement having the same terms as the Convertible Debentures and will become convertible into common shares of the successor public corporation.

The Convertible Debentures will be offered for sale to the public in each of the provinces and territories of Canada pursuant to a short form prospectus of the Issuer to be filed with Canadian securities regulatory authorities in all Canadian jurisdictions.

The underwriting syndicate is led by RBC Capital Markets and TD Securities and Scotia Capital, acting as joint book-runners.

The offering is scheduled to close on or about July 8, 2010, subject to certain conditions, including conditions to be set forth in the underwriting agreement.

Yellow Media (formerly YPG Holdings) has four issues of preferreds outstanding:

• YPG.PR.A, OpRet, closed 6/14 at 24.60-73 to yeild 4.87-63%
• YPG.PR.B, OpRet, 20.56-72 to yield 8.40-27%
• YPG.PR.C, FixedReset, 24.10-30, 7.16-10%
• YPG.PR.D, FixedReset, 24.20-60, 7.24-11%

Update: DBRS rates them at BBB.