RY.PR.P, a Fixed-Reset 6.25%+419 issue announced January 6, has settled successfully, closing at 25.30-33, 30×20, after trading 576,398 shares in a range of 25.15-35.
There was no press release issued by Royal Bank indicating any take-up of the greenshoe, which was for up to 3-million shares over the stated size of 8-million.
RY.PR.P is tracked by HIMIPref™. It has been added to the Fixed-Reset Index.
NA.PR.O, a Fixed-Reset 6.60%+463 issue announced January 5, has settled successfully. It closed today at 24.86-95, 20×100, after trading 177,885 shares in a range of 24.70-94.
National Bank has announced:
Prior to the closing of the offering, the underwriters agreed to purchase 1,800,000 additional Series 24 Preferred Shares through the underwriters’ option, bringing the total issue to 6,800,000 shares and gross proceeds of the offering to $170 million.
The maximum greenshoe was for 3-million shares; not fully taken up but a very creditable effort.
NA.PR.O is tracked by HIMIPref™. It has been added to the Fixed-Reset Index.
TD.PR.E, a Fixed-Reset 6.25%+437 issue announced January 5, closed with a quote of 25.30-33 today after trading 972,217 shares in a range of 25.06-39.
TD Bank announced on January 6 that:
a group of underwriters led by TD Securities Inc. has exercised the option to purchase an additional 3 million non-cumulative 5-Year Rate Reset Class A Preferred Shares, Series AE (the Series AE Shares) carrying a face value of $25.00 per share. This brings the total issue announced on January 5, 2009, and expected to close January 14, 2009, to 12 million shares and gross proceeds raised under the offering to $300 million.
Well! There’s lots of money around, at the right price!
TD.PR.E is tracked by HIMIPref™. It has been added to the Fixed-Reset Index.
Nortel has announced:
that it, Nortel Networks Limited (“NNL”) and certain of its other Canadian subsidiaries will seek creditor protection under the Companies’ Creditors Arrangement Act (“CCAA”) in Canada. As well, certain of the Company’s U.S. subsidiaries, including Nortel Networks Inc. and Nortel Networks Capital Corporation, have filed voluntary petitions in the United States under Chapter 11 of the U.S. Bankruptcy Code, and certain of the Company’s EMEA** subsidiaries are expected to make consequential filings in Europe.
…
In addition, the Company will request the courts to impose certain restrictions on trading in the Company’s common shares and Nortel Networks Limited’s preferred shares in order to preserve valuable tax assets in the United States. Trading restrictions, if imposed, would apply immediately to investors beneficially owning at least 4.75% of (i) the outstanding common shares of Nortel Networks Corporation or (ii) any series of preferred shares of Nortel Networks Limited. For these purposes, beneficial ownership of stock will be measured in accordance with special U.S. tax rules that, among other things, apply constructive ownership concepts and take into account indirect holdings. There will be no immediate trading restrictions imposed on debt securities of the Company or its affiliates, but the Company by this press release is advising debtholders that the courts may, at the Company’s request, impose certain trading restrictions at a later date.
I confess I am not familiar with the “special U.S. tax rules” that have made trading curbs advisable.
NTL.PR.F & NTL.PR.G were slapped with a default rating by DBRS after suspending dividends in December.
NTL.PR.F & NTL.PR.G are tracked by HIMIPref™ but have been relegated to the “Scraps” index rather than “Ratchet” on credit concerns.
Assiduous Reader medinvic has asked if the preferreds are automatically worthless. Well … not necessarily, but that’s the base case scenario. At this point, I think that the best preferred shareholders can hope for is a Thornberg-style cram-down offer they can’t refuse, as discussed on July 22, 2008.
Update: The Toronto Stock Exchange has announced:
DELISTING REVIEW – Nortel Networks Limited (the “Company”) – TSX is reviewing the Cumulative Redeemable Class A Preferred Shares, Series 5 (Symbol: NTL.PR.F) and the Non-Cumulative Redeemable Class A Preferred Shares, Series 7 (Symbol: NTL.PR.G) of the Company with respect to meeting the requirements for continued listing. The Company is being reviewed on an expedited basis.
Update, 2009-1-16: The TSX has announced:
Further to TSX Bulletin 2009-0057 dated January 14, 2009, TSX’s review of the Cumulative Redeemable Class A Preferred Shares, Series 5 (Symbol: NTL.PR.F) and the Non-Cumulative Redeemable Class A Preferred Shares, Series 7 (Symbol: NTL.PR.G) of the Company with respect to meeting the requirements for continued listing has been stayed pursuant to the Initial Order issued on January 14, 2009 by the Ontario Superior Court of Justice under the Companies’ Creditors Arrangement Act, R.S.C. 1985, c. C-36, As Amended.
Xstrata Canada has announced:
that it will mail on January 14, 2009 a notice of redemption for all of its outstanding Cumulative Preferred Shares, Series 3 (TSX:FAL.PR.B) (the “Preferred Shares”). Xstrata Canada will redeem all of the outstanding Preferred Shares on March 1, 2009 for C$25.00 in cash, plus accrued and unpaid dividends in respect of each Preferred Share up to, but excluding, March 1, 2009. Xstrata Canada intends to use its internal cash resources to fund the aggregate redemption price of approximately C$79 million. Following the redemption of the Preferred Shares, Xstrata Canada will no longer have any publicly traded shares.
This follows the redemption of FAL.PR.A and FAL.PR.H last year.
FAL.PR.B is tracked by HIMIPref™. It was moved from the FixedFloater subindex to Scraps in August 2008 on volume concerns.
Financial 15 Corp has announced:
There will not be a distribution paid to the Class A shares for December 31, 2008 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 December 15, 2008 was $13.58.
This announcement was actually made the day prior to the DBRS announcement of a mass split share review including FTN.PR.A. I regret not having publicized this release earlier.
FTN.PR.A is tracked by HIMIPref™. It is included in the SplitShare sub-index.
According to the original 2004 prospectus:
It will be the policy of the Board of Directors to declare and pay quarterly dividends on the Capital Shares in an amount equal to the dividends received by the Company on the BMO Shares minus the distributions payable on the Preferred Shares and all administrative and operating expenses. Based on the current BMO Share dividends and estimated expenses of the Company, the Company expects to pay quarterly dividends of $0.0180 per Capital Share ($0.0720 per year or 0.47% of the Capital Share offering price).
The company has announced today:
that the Board has changed the dividend policy on the Capital Shares. As a result of the declining downside asset coverage on the Preferred Shares during the quarter, the Company has determined that any excess of the dividends received by the Company on the Bank of Montreal common shares minus the distributions payable on the Preferred Shares and all administrative and operating expenses will be invested in short-term debt securities or Bank of Montreal common shares until the scheduled redemption of the Company’s Capital Shares and Preferred Shares on August 5, 2009.
The preferred shares have asset coverage of 1.2-:1 as of January 2. They were caught up in the DBRS Mass Review of Splits and are currently under Review-Negative. I suspect the change in policy was prompted by discussions of this review.
BMT.PR.A is tracked by HIMIPref™. It would normally be included in the SplitShare index but has been relegated to “Scraps” on volume concerns.
According to the original prospectus of July 2000:
It is not currently expected that holders of the Capital Shares will receive any dividends. If dividends on the Portfolio Shares exceed the amount of the fixed Preferred Share distributions and all expenses of the Company, the excess may be paid as dividends on the Capital Shares. In addition, if the Company realizes capital gains and would be liable to pay tax thereon, the Company may declare a capital gains dividend on the Capital Shares. Such dividend will minimize any tax payable by the Company and, as such, should benefit the Company and its shareholders. The Company expects to pay such dividend in Capital Shares rather than in cash. See ‘‘The Company – Distribution Policy’’.
In July 2006, following a refinancing of the preferred shares, the company announced:
In addition, the Board of Directors of the Company has declared a special dividend of $0.1290 per Capital Share payable on July 31, 2006 to holders of record at the close of business on July 28, 2006. The dividend on the Capital Shares represents the portfolio share dividends received in excess of the fixed Preferred Share dividends and forecasted expenses of the Company for its 2006 fiscal year.
… which was followed by regular quarterly dividends.
Today, the company announced:
Lifeco has determined to revise its Capital Share dividend policy so that to the extent the downside asset coverage on the Preferred Shares drops below 1.3 times at any time during the quarter, any excess of the dividends received on the underlying portfolio securities minus the distributions payable on the Preferred Shares and all administrative and operating expenses will be reinvested in short-term debt securities or underlying portfolio securities.
… which is good news for the preferred shareholders! According to the company, asset coverage on January 2 was 1.5-:1.
LSC.PR.C has been caught up in the latest DBRS Mass Review of Split Shares … I suspect that such a policy change was a requirement of keeping their rating … if, in fact, they keep it.
LSC.PR.C is not tracked by HIMIPref™.
IAG.PR.C met a hostile reception when issued in November, closing at 23.80-90 on its opening day, but has since struggled back to today’s close 24.40-50, 9×225, on volume of 1,000 shares all at 24.50.
That was then. This is now.
The underwriters have announced an inventory blow-out sale at 23.50, to close January 14.
Many thanks to Assiduous Reader MP for providing me with proof that this is public, if not particularly well-publicized, knowledge!
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.
| December, 2008 | ||||
| Issue | Index | DBRS Rating | Monthly Performance | Notes (“Now” means “December 31”) |
| BCE.PR.Z | FixFloat | Pfd-2(low) | -23.35% | |
| BCE.PR.Y | Ratchet | Pfd-2(low) | -22.73% | |
| BCE.PR.S | FixFloat | Pfd-2(low) | -20.97% | |
| BCE.PR.R | FixFloat | Pfd-2(low) | -19.35% | |
| BCE.PR.I | FixFloat | Pfd-2(low) | -18.83% | |
| … | … | … | … | … |
| BNA.PR.B | SplitShare | Pfd-2(low) | +31.21% | Asset coverage of 1.8-:1 as of December 31 based on BAM.A at 18.55 and 2.4 BAM.A per preferred. Now with a pre-tax bid-YTW of 8.87% based on a bid of 20.01 and a hardMaturity 2016-3-25 at 25.00. Presumably helped out a lot by very favourable monthly retraction terms – estimated retraction price is now $21.77 based on an NAV of 44.52. |
| FTN.PR.A | SplitShare | Pfd-2(low) Review Negative |
+31.27% | Asset coverage of 1.4-:1 as of December 15 according to the company, with an estimated NAV of 13.75 based on the change in XFN since then. Now with a pre-tax bid-YTW of 8.94% based on a bid of 8.16 and a hardMaturity 2015-12-1. Estimated retraction price of $8.70 with capital units offered at $4.50. |
| BAM.PR.K | Floater | Pfd-2(low) | +34.66% | Was the worst performer in November, with a return of -35.06%. |
| FFN.PR.A | SplitShare | Pfd-2(low) Review Negative |
+35.09% | Was the fifth-worst performer in November, with a return of -25.48%. Asset coverage of 1.1+:1 as of December 15 according to the company; NAV now estimated as 11.63 based on change in XFN since then. Now with a pre-tax bid-YTW of 11.07% based on a bid of 7.56 and a hardMaturity 2014-12-1 at 10.00. Estimated retraction price of $8.19 with capital units offered at $2.97. |
| BAM.PR.B | Floater | Pfd-2(low) | +37.05% | Was the second-worst performer in November, with a return of -30.81%. |
The December rankings are not as mysterious as the November rankings … three of the best performers are merely bouncing back from horrible performance last month, while the five worst performers are all BCE issues … reacting as one might expect to the death of the Teachers’ deal.
It is interesting to note that the BPP floaters – issued by BPO Properties, which never fails to irritate me – had a horrible month. Two of the three would have made the list had they been included in the indices (they are excluded on credit concerns) … and they are now trading roughly kinda call it even yield with the BAM floaters, ending (for now) the long-standing credit inversion. To continue the graphs given in that post:
Was somebody saying something about efficient markets?