Category: Issue Comments

The Toronto-Dominion Bank has announced:

the applicable dividend rates for its Non-Cumulative 5-Year Rate Reset Preferred Shares, Series 18 (Non-Viability Contingent Capital (NVCC)) (the “Series 18 Shares”) and Non-Cumulative Floating Rate Preferred Shares, Series 19 (Non-Viability Contingent Capital (NVCC)) (the “Series 19 Shares”).

With respect to any Series 18 Shares that remain outstanding after May 1, 2023 (being the first business day following the conversion date of April 30, 2023, which falls on a Sunday), holders of the Series 18 Shares will be entitled to receive quarterly fixed non-cumulative preferential cash dividends, as and when declared by the Board of Directors of TD, subject to the provisions of the Bank Act (Canada). The dividend rate for the 5-year period from and including April 30, 2023 to but excluding April 30, 2028 will be 5.747%, being equal to the 5-Year Government of Canada bond yield determined as at March 31, 2023 plus 2.70%, as determined in accordance with the terms of the Series 18 Shares.

With respect to any Series 19 Shares that may be issued on May 1, 2023, holders of the Series 19 Shares will be entitled to receive quarterly floating rate non-cumulative preferential cash dividends, calculated on the basis of the actual number of days elapsed in such quarterly period divided by 365, as and when declared by the Board of Directors of TD, subject to the provisions of the Bank Act (Canada). The dividend rate for the floating rate period from and including April 30, 2023 to but excluding July 31, 2023, will be 7.107%, being equal to the 90-day Government of Canada Treasury Bill yield determined as of March 31, 2023 plus 2.70%, as determined in accordance with the terms of the Series 19 Shares.

Beneficial owners of Series 18 Shares who wish to exercise their conversion right should communicate as soon as possible with their broker or other nominee to obtain instructions for exercising such right on or prior to the deadline for exercise, which is 5:00 p.m. (Toronto time) on April 17, 2023.

Inquiries should be directed to TD’s Registrar and Transfer Agent, TSX Trust Company, at 1-800-387-0825 (or in Toronto 416-682-3860).

TD.PF.J was issued as a FixedReset, 4.70%+270, that commenced trading 2018-3-14 after being announced 2018-3-5. An extension was announced in March, 2023. The issue has been tracked by HIMIPref™ and is assigned to the FixedReset (Discount) sub-index.

Brookfield Infrastructure has announced:

that after having taken into account all election notices received by the March 16, 2023 deadline for the reclassification of its Cumulative Class A Preferred Limited Partnership Units, Series 9 (the “Series 9 Units”) (TSX: BIP.PR.E) into Cumulative Class A Preferred Limited Partnership Units, Series 10 (the “Series 10 Units”), it has determined that there will be no reclassification of Series 9 Units into Series 10 Units, and holders of Series 9 Units will retain their Series 9 Units.

There were 18,000 Series 9 Units tendered for reclassification, which is less than the 1,000,000 units required to give effect to reclassifications of Series 9 Units into Series 10 Units.

BIP.PR.E was issued as a FixedReset, 5.00%+300M500, ROC, that commenced trading 2018-1-23 after being announced 2018-1-15. The issue will reset to 6.642% effective 2023-4-1. It is tracked by HIMIPref™ and has been assigned to the FixedResets (Discount) subindex on the basis of its P-2(low) rating from S&P (it is not rated by DBRS).

Manulife Financial Corporation has announced (on 2023-3-7):

that after having taken into account all election notices received by the March 6, 2023 deadline for conversion of its currently outstanding 8,000,000 Non-cumulative Rate Reset Class 1 Shares Series 11 (the “Series 11 Preferred Shares”) (TSX: MFC.PR.J) into Non-cumulative Floating Rate Class 1 Shares Series 12 of Manulife (the “Series 12 Preferred Shares”), the holders of Series 11 Preferred Shares are not entitled to convert their Series 11 Preferred Shares into Series 12 Preferred Shares. There were 117,415 Series 11 Preferred Shares elected for conversion, which is less than the minimum one million shares required to give effect to conversions into Series 12 Preferred Shares.

As announced by Manulife on February 21, 2023, after March 19, 2023, holders of Series 11 Preferred Shares will be entitled to receive fixed rate non-cumulative preferential cash dividends on a quarterly basis, as and when declared by the Board of Directors of Manulife and subject to the provisions of the Insurance Companies Act (Canada). The dividend rate for the five-year period commencing on March 20, 2023, and ending on March 19, 2028, will be 6.15900% per annum or $0.384938 per share per quarter, being equal to the sum of the five-year Government of Canada bond yield as of February 21, 2023, plus 2.61%, as determined in accordance with the terms of the Series 11 Preferred Shares.

Subject to certain conditions described in the prospectus supplement dated November 27, 2012 relating to the issuance of the Series 11 Preferred Shares, Manulife may redeem the Series 11 Preferred Shares, in whole or in part, on March 19, 2028 and on September 19 every five years thereafter.

MFC.PR.J was issued as a FixedReset, 4.00%+261 that commenced trading 2012-12-4 after being announced 2012-11-27. After the 2018 notice of extension it reset to 4.731%; I recommended against conversion; and there was no conversion. Notice of extension was provided in 2023 and the issue reset to 6.159%. The issue is tracked by HIMIPref™ and is assigned to the Insurance FixedReset (Discount) sub-index.

The Toronto-Dominion Bank has announced (on 2023-3-29):

that it does not intend to exercise its right to redeem all or any part of the currently outstanding 14 million Non-Cumulative 5-Year Rate Reset Preferred Shares, Series 18 (Non-Viability Contingent Capital (NVCC)) (the “Series 18 Shares”) of TD on April 30, 2023. As a result and subject to certain conditions set out in the prospectus supplement dated March 7, 2018 relating to the issuance of the Series 18 Shares, the holders of the Series 18 Shares have the right to convert all or part of their Series 18 Shares, on a one-for-one basis, into Non-Cumulative Floating Rate Preferred Shares, Series 19 (Non-Viability Contingent Capital (NVCC)) (the “Series 19 Shares”) of TD on May 1, 2023 (being the first business day following the conversion date of April 30, 2023, which falls on a Sunday). Holders who do not exercise their right to convert their Series 18 Shares into Series 19 Shares on such date will continue to hold their Series 18 Shares, subject to the conditions described below.

The foregoing conversion right is subject to the conditions that: (i) if TD determines that there would be less than 1,000,000 Series 19 Shares outstanding after taking into account all shares tendered for conversion on May 1, 2023, then holders of Series 18 Shares will not be entitled to convert their shares into Series 19 Shares, and (ii) alternatively, if TD determines that there would remain outstanding less than 1,000,000 Series 18 Shares after taking into account all shares tendered for conversion on May 1, 2023, then all remaining Series 18 Shares will automatically be converted into Series 19 Shares on a one-for-one basis on May 1, 2023. In either case, TD will give written notice to that effect to holders of Series 18 Shares no later than April 24, 2023 (being the first business day following the notice date of April 23, 2023, which falls on a Sunday).

The dividend rate applicable to the Series 18 Shares for the 5-year period from and including April 30, 2023 to but excluding April 30, 2028, and the dividend rate applicable to the Series 19 Shares for the 3-month period from and including April 30, 2023 to but excluding July 31, 2023, will be determined and announced by way of a press release on March 31, 2023.

Beneficial owners of Series 18 Shares who wish to exercise their conversion right should communicate as soon as possible with their broker or other nominee to obtain instructions for exercising such right during the conversion period, which runs from March 31, 2023 until 5:00 p.m. (Toronto time) on April 17, 2023.

Inquiries should be directed to TD’s Registrar and Transfer Agent, TSX Trust Company, at 1-800-387-0825 (or in Toronto 416-682-3860).

TD.PF.J was issued as a FixedReset, 4.70%+270, that commenced trading 2018-3-14 after being announced 2018-3-5. It has been tracked by HIMIPref™ and is assigned to the FixedReset (Discount) sub-index.

Brompton Group has announced (on 2023-3-27):

Brompton Oil Split Corp. (the “Fund”) announces its intention to effect a consolidation of its Class A shares. As a result of the special non-concurrent retraction (the “Special Retraction”) granted in connection with the extension of the maturity date of the Fund to March 28, 2024 there will be 950,914 Class A shares and 822,414 Preferred shares outstanding. In order to restore an equal number of outstanding shares of each class following the Special Retraction, the Fund intends to consolidate its Class A shares such that each holder of a Class A share will receive approximately 0.864866854 Class A shares for each Class A share held (the “Share Consolidation”). It is expected that the Class A shares will trade on a post-consolidation basis at the opening of trading on April 11, 2023. The Share Consolidation is subject to approval by the Toronto Stock Exchange (the “TSX”). The value of the Class A shareholders’ holdings will remain the same and as a result, the net asset value (“NAV”) per Class A share, following the Share Consolidation, will increase on a proportionate basis. As at March 24, 2023, the pro forma NAV per Class A share after giving effect to the Share Consolidation would be $2.38 ($2.06 pre consolidation) and the asset coverage ratio for the Preferred shares would increase from 14% to 19%.

The Share Consolidation will allow Class A shareholders to maintain their current investment in the Fund and continue to have enhanced exposure to the Fund’s portfolio. The Fund invests in a portfolio of equity securities of large capitalization North American oil and gas issuers, primarily focused on those with significant exposure to oil. Brompton Funds Limited, the manager of the Fund, believes that the Fund’s investment strategy is well positioned to participate in opportunities that are expected to continue in the energy sector.

No fractional Class A shares will be issued and the number of Class A shares each holder shall receive will be rounded down to the nearest whole number. The Share Consolidation is a non-taxable event.

OSP.PR.A recently recently reset to 8.00% for a one year term and I suppose the fat coupon persuaded many holders to hang on despite the poor credit quality of the issue and the short term until the next reset.

Brookfield Infrastructure Partners L.P. has announced:

that it has determined the fixed distribution rate on its Cumulative Class A Preferred Limited Partnership Units, Series 9 (“Series 9 Units”) (TSX: BIP.PR.E) for the five years commencing April 1, 2023 and ending March 31, 2028.

Series 9 Units and Series 10 Units

If declared, the fixed quarterly distributions on the Series 9 Units during the five years commencing April 1, 2023 will be paid at an annual rate of 6.642% ($0.415125 per unit per quarter).

Holders of Series 9 Units have the right, at their option, exercisable not later than 5:00 p.m. (Toronto time) on March 16, 2023, to reclassify all or part of their Series 9 Units, on a one-for-one basis, into Cumulative Class A Preferred Limited Partnership Units, Series 10 (“Series 10 Units”), effective March 31, 2023.

The quarterly floating rate distributions on the Series 10 Units will be paid at an annual rate, calculated for each quarter, of 3.00% over the annual yield on three-month Government of Canada treasury bills. The actual quarterly distribution rate in respect of the April 1, 2023 to June 30, 2023 distribution period for the Series 10 Units will be 1.88582% (7.564% on an annualized basis) and the distribution, if declared, for such distribution period will be $0.471455 per unit, payable on June 30, 2023.

Holders of Series 9 Units are not required to elect to reclassify all or any part of their Series 9 Units into Series 10 Units.

As provided in the unit conditions of the Series 9 Units, (i) if Brookfield Infrastructure determines that there would be fewer than 1,000,000 Series 9 Units outstanding after March 31, 2023, all remaining Series 9 Units will be automatically reclassified into Series 10 Units on a one-for-one basis effective March 31, 2023; or (ii) if Brookfield Infrastructure determines that there would be fewer than 1,000,000 Series 10 Units outstanding after March 31, 2023, no Series 9 Units will be reclassified into Series 10 Units. There are currently 7,986,595 Series 9 Units outstanding.

The Toronto Stock Exchange (“TSX”) has conditionally approved the listing of the Series 10 Units effective upon reclassification. Listing of the Series 10 Units is subject to Brookfield Infrastructure fulfilling all the listing requirements of the TSX.

BIP.PR.E was issued as a FixedReset, 5.00%+300M500, ROC, that commenced trading 2018-1-23 after being announced 2018-1-15. It is tracked by HIMIPref™ and has been assigned to the FixedResets subindex on the basis of its P-2(low) rating from S&P (it is not rated by DBRS).

Thanks to Assiduous Reader CanSiamCyp for bringing this to my attention!

Industrial Alliance Insurance and Financial Services Inc. has announced:

that it has sent today to all shareholders of its Non-Cumulative 5-Year Rate Reset Class A Preferred Shares Series I (the “Series I Preferred Shares”) a formal notice and instructions for the redemption of the Series I Preferred Shares outstanding as of today. Upon the Series I Redemption scheduled for March 31, 2023, iA Insurance will pay to the holders of the Series I Preferred Shares the redemption price of $25 less any taxes required to be withheld or deducted. There are 6,000,000 Series I Preferred Shares outstanding as of today.

Separately from the redemption price, the final quarterly dividend of $0.3000 per Series I Preferred Share will be paid in the usual manner on March 31, 2023 to shareholders of record on March 24, 2023. After the Series I Preferred Shares are redeemed, holders of Series I Preferred Shares will cease to be entitled to distributions of dividends and will not be entitled to exercise any rights as holders other than to receive the redemption price and the final quarterly dividend described above.

UPDATE, 2023-3-1: The company has issued a correction; the record date for the dividend is February 24, 2023. Thanks to Assiduous Reader xalier for his comment.

IAF.PR.I was issued as IAG.PR.I, a FixedReset, 4.80%+275, that commenced trading 2018-3-7 after being announced 2018-2-26. The ticker changed in 2019. It has been tracked by HIMIPref™ and is assigned to the FixedResets (Discount) subindex.

Thanks to Assiduous Readers DrSpinz, niagara and CanSiamCyp for bringing this to my attention!

BCE Inc. has announced:

that 3,635,351 of its 9,999,991 fixed-rate Cumulative Redeemable First Preferred Shares, Series AC (“Series AC Preferred Shares”) have been tendered for conversion on March 1, 2023, on a one-for-one basis, into floating-rate Cumulative Redeemable First Preferred Shares, Series AD (“Series AD Preferred Shares”). In addition, 351,634 of its 9,864,509 Series AD Preferred Shares have been tendered for conversion on March 1, 2023, on a one-for-one basis, into Series AC Preferred Shares. Consequently, on March 1, 2023, BCE will have 6,716,274 Series AC Preferred Shares and 13,148,226 Series AD Preferred Shares issued and outstanding. The Series AC Preferred Shares and the Series AD Preferred Shares will continue to be listed on the Toronto Stock Exchange under the symbols BCE.PR.C and BCE.PR.D, respectively.

The Series AC Preferred Shares will pay on a quarterly basis, for the five-year period beginning on March 1, 2023, as and when declared by the Board of Directors of BCE, a fixed cash dividend based on an annual fixed dividend rate of 5.08%.

The Series AD Preferred Shares will continue to pay a monthly floating adjustable cash dividend for the five-year period beginning on March 1, 2023, as and when declared by the Board of Directors of BCE. The monthly floating adjustable dividend for any particular month will continue to be calculated based on the prime rate for such month and using the Designated Percentage for such month representing the sum of an adjustment factor (based on the market price of the Series AD Preferred Shares in the preceding month) and the Designated Percentage for the preceding month.

BCE.PR.C is a FixedFloater that has been around for years. A conversion notice was sent in 2008 and it reset to 4.60%. About 55% was converted to BCE.PR.D. A conversion notice was sent in 2013 and it reset to 3.55%. A conversion notice was sent in 2018 and it reset to 4.38%. BCE.PR.C resets to 5.08% effective 2023-3-1.

BCE.PR.D is a RatchetRate preferred that was first issued by partial conversion from BCE.PR.C.

Manulife Financial Corporation has announced (although not yet on their website):

the applicable dividend rates for its Non-cumulative Rate Reset Class 1 Shares Series 11 (the “Series 11 Preferred Shares”) (TSX: MFC.PR.J) and Non-cumulative Floating Rate Class 1 Shares Series 12 (the “Series 12 Preferred Shares”).

With respect to any Series 11 Preferred Shares that remain outstanding after March 19, 2023, holders thereof will be entitled to receive fixed rate non-cumulative preferential cash dividends on a quarterly basis, as and when declared by the Board of Directors of Manulife and subject to the provisions of the Insurance Companies Act (Canada). The dividend rate for the five-year period commencing on March 20, 2023, and ending on March 19, 2028, will be 6.15900% per annum or $0.384938 per share per quarter, being equal to the sum of the five-year Government of Canada bond yield as at February 21, 2023, plus 2.61%, as determined in accordance with the terms of the Series 11 Preferred Shares.

With respect to any Series 12 Preferred Shares that may be issued on March 20, 2023 in connection with the conversion of the Series 11 Preferred Shares into the Series 12 Preferred Shares, holders thereof will be entitled to receive floating rate non-cumulative preferential cash dividends on a quarterly basis, calculated on the basis of the actual number of days elapsed in each quarterly floating rate period divided by 365, as and when declared by the Board of Directors of Manulife and subject to the provisions of the Insurance Companies Act (Canada). The dividend rate for the three-month period commencing on March 20, 2023, and ending on June 19, 2023, will be 1.80975% (7.18000% on an annualized basis) or $0.452438 per share, being equal to the sum of the three-month Government of Canada Treasury bill yield as at February 21, 2023, plus 2.61%, as determined in accordance with the terms of the Series 12 Preferred Shares.

Beneficial owners of Series 11 Preferred Shares who wish to exercise their right of conversion should instruct their broker or other nominee to exercise such right before 5:00 p.m. (Toronto time) on March 6, 2023. The news release announcing such conversion right was issued on January 31, 2023 and can be viewed on SEDAR or Manulife’s website. Conversion inquiries should be directed to Manulife’s Registrar and Transfer Agent, TSX Trust Company, at 1–800–783–9495.

The Toronto Stock Exchange (“TSX”) has conditionally approved the listing of the Series 12 Preferred Shares effective upon conversion. Listing of the Series 12 Preferred Shares is subject to Manulife fulfilling all the listing requirements of the TSX and, upon approval, the Series 12 Preferred Shares will be listed on the TSX under the trading symbol “MFC.PR.S”.

MFC.PR.J was issued as a FixedReset, 4.00%+261 that commenced trading 2012-12-4 after being announced 2012-11-27. After the 2018 notice of extension it reset to 4.731%; I recommended against conversion; and there was no conversion. Notice of extension was provided in 2023. The issue is tracked by HIMIPref™ and is assigned to the Insurance FixedReset (Discount) sub-index.

Enbridge Inc. has announced (on 2023-2-14):

that none of its outstanding Cumulative Redeemable Minimum Rate Reset Preference Shares, Series 19 (Series 19 Shares) will be converted into Cumulative Redeemable Preference Shares, Series 20 (Series 20 Shares) on March 1, 2023.

After taking into account all conversion notices received from holders of its outstanding Series 19 Shares by the February 14, 2023 deadline for the conversion of the Series 19 Shares into Series 20 Shares, less than the 1,000,000 Series 19 Shares required to give effect to conversions into Series 20 Shares were tendered for conversion.

ENB.PF.K was issued as a FixedReset 4.90%+317M490 that commenced trading 2017-2-11 after being announced 2017-12-4. The issue resets to 6.212% effective 2023-3-1. It is tracked by HIMIPref™ but has been relegated to the Scraps – FixedReset (Discount) subindex on credit concerns.

Thanks to Assiduous Reader CanSiamCyp for bringing this to my attention.