Category: Issue Comments

Brookfield Corporation has announced:

the reset dividend rate on its Cumulative Class A Preference Shares, Series 24 (the “Series 24 Shares”) (TSX: BN.PR.R) for the five years commencing July 1, 2026 and ending June 30, 2031.

If declared, the fixed quarterly dividends on the Series 24 Shares during the five years commencing July 1, 2026 will be paid at an annual rate of 5.432% ($0.3395 per share per quarter).

Holders of Series 24 Shares have the right, at their option, exercisable not later than 5:00 p.m. (Toronto time) on June 15, 2026, to convert all or part of their Series 24 Shares, on a one-for-one basis, into Cumulative Class A Preference Shares, Series 25 (the “Series 25 Shares”), effective June 30, 2026. The quarterly floating rate dividends on the Series 25 Shares will be paid at an annual rate, calculated for each quarter, of 2.30% over the annual yield on three-month Government of Canada treasury bills. The actual quarterly dividend rate in respect of the July 1, 2026 to September 30, 2026 dividend period for the Series 25 Shares will be 1.16525% (4.623% on an annualized basis) and the dividend, if declared, for such dividend period will be $0.2913125 per share, payable on September 30, 2026.

Holders of Series 24 Shares are not required to elect to convert all or any part of their Series 24 Shares into Series 25 Shares.

As provided in the share conditions of the Series 24 Shares, (i) if Brookfield determines that there would be fewer than 1,000,000 Series 24 Shares outstanding after June 30, 2026, all remaining Series 24 Shares will be automatically converted into Series 25 Shares on a one-for-one basis effective June 30, 2026; and (ii) if Brookfield determines that there would be fewer than 1,000,000 Series 25 Shares outstanding after June 30, 2026, no Series 24 Shares will be permitted to be converted into Series 25 Shares. There are currently 10,808,027 Series 24 Shares outstanding.

The Toronto Stock Exchange (“TSX”) has conditionally approved the listing of the Series 25 Shares effective upon conversion. Listing of the Series 25 Shares is subject to Brookfield fulfilling all the listing requirements of the TSX.

BN.PR.R was issued as BAM.PR.R, a FixedReset 5.40%+230 that commenced trading 2010-1-14 after being announced 2010-1-5. It reset to 3.014% in 2016; I recommended against conversion but there was a 14% conversion to the FloatingReset BAM.PR.S anyway. The issue reset to 3.237% in 2021, at which time the FloatingResets were forcibly converted back to the FixedReset. The ticker changed in December, 2022.

Brookfield Office Properties Inc., a subsidiary of Brookfield Property Partners L.P. has announced:

the reset dividend rate on its Class AAA Preference Shares, Series N (“Series N Shares”) (TSX: BPO.PR.N).

Series N Shares

If declared, the fixed quarterly dividends on the Series N Shares for the five years commencing July 1, 2026 and ending June 30, 2031 will be paid at an annual rate of 6.2060% ($0.387875 per share per quarter).

Holders of Series N Shares have the right, at their option, exercisable not later than 5:00 p.m. (Toronto time) on June 15, 2026, to convert all or part of their Series N Shares, on a one-for-one basis, into Class AAA Preference Shares, Series O (the “Series O Shares”), effective June 30, 2026.

The quarterly floating rate dividends on the Series O Shares have an annual rate, calculated for each quarter, of 3.07% over the annual yield on three-month Government of Canada treasury bills. The actual quarterly dividend rate for the July 1, 2026 to September 30, 2026 dividend period for the Series O Shares will be 1.358580% (5.39% on an annualized basis) and the dividend, if declared, for such dividend period will be $0.339645 per share, payable on September 30, 2026.

Holders of Series N Shares are not required to elect to convert all or any part of their Series N Shares into Series O Shares.

As provided in the share conditions of the Series N Shares, (i) if Brookfield determines that there would be fewer than 1,000,000 Series N Shares outstanding after June 30, 2026, all remaining Series N Shares will be automatically converted into Series O Shares on a one-for-one basis effective June 30, 2026; and (ii) if Brookfield determines that there would be fewer than 1,000,000 Series O Shares outstanding after June 30, 2026, no Series N Shares will be permitted to be converted into Series O Shares. There are currently 10,875,438 Series N Shares outstanding.

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

BPO.PR.N was issued a FixedReset 6.15%+307, that commenced trading 2010-1-20 after being announced 2010-1-11. The issue attracted some unfavourable comment on issue due to the relatively long call lock-out period – which shows complete misunderstanding of the investment impact of an issuer call option, but we’ll ignore that. The issue reset to 3.782% in 2016; I recommended against conversion and there was no conversion.The issue reset to 4.007% in 2021, with no conversion. It is tracked by HIMIPref™ but relegated to the Scraps – FixedReset (Discount) subindex on credit concerns.

Brookfield Office Properties Inc. has announced (on 2026-05-19):

that it intends to redeem all 7,982,204 of its outstanding Class AAA Preference Shares, Series CC (TSX: BPO.PR.C), all of which are held by CDS & Co., as nominee of CDS Clearing and Depositary Services Inc., for cash on June 30, 2026. The redemption price for each such share will be C$25.00. Separately from the redemption price, the final quarterly cash dividend of C$0.382313 per share, will be paid in the usual manner on June 30, 2026, to holders of record on June 15, 2026.

Notice of Redemption has been sent to CDS & Co. Payment of the redemption price will be made to all beneficial holders of the Series CC Shares on or after June 30, 2026 through the facilities of CDS & Co.

BPO.PR.C was issued as a FixedReset, 6.00%+518M600, that commenced trading 2016-4-27 after being announced 2016-4-18. It reset to 6.12% in 2021 with no conversion. The issue has been tracked by HIMIPref™ but relegated to the Scraps index on credit concerns.

Thanks to the Assiduous Reader who brought this to my attention!

DBRS has announced that it:

upgraded the credit rating on the Preferred Shares issued by Dividend 15 Split Corp. II (the Company) to Pfd-3 from Pfd-3 (low). The rating upgrade reflects the significant improvement in downside protection for the Preferred Shares over the past year.

The Company invests in an actively managed portfolio of common shares (the Portfolio) which currently primarily includes securities of the following publicly traded Canadian companies, each of whose securities will generally represent no less than 4% and no more than 8% of the net asset value of the Company: Bank of Montreal, Royal Bank of Canada, Bank of Nova Scotia, Sun Life Financial Inc., BCE Inc, TC Energy Corp., Canadian Imperial Bank of Commerce, TELUS Corporation, Thomson Reuters Corporation, Enbridge Inc, The Toronto-Dominion Bank, Manulife Financial, TransAlta Corporation, National Bank of Canada. The Company may also invest up to 15% of the net asset value in equity securities of issuers other than the companies listed above. In order to supplement the dividends received on the portfolio and to reduce risk, the Company will from time to time write covered call options in respect of some or all of the common shares in the Portfolio. The Portfolio is actively managed by Quadravest Capital Management.

The Company’s termination date is December 1, 2029. At termination, the holders of the Preferred Shares will be entitled to the value of the Company up to the face amount of the Preferred Shares in priority to the holders of the Class A Shares. Holders of the Class A Shares will receive the remaining value of the Company. The Company’s board of directors can extend the termination date for additional successive terms of five years each, provided that shareholders are given an optional special retraction right in connection with such extension.

Dividends received from the Portfolio are used to pay fixed cumulative monthly cash distributions. Holders of the Preferred Shares are entitled to receive fixed cumulative preferential monthly cash dividends in the amount of $0.05833 per Preferred Share, yielding 7.00% per annum on the original issue price of $10.00. Holders of the Class A Shares currently receive regular monthly cash distributions, targeted to be $0.10 per Class A Share. Distributions to the Class A Shares are made only if the distributions on the Preferred Shares are not in arrears and the NAV per unit (which consists of one Class A and one Preferred Share) is in excess of $15.00 Distributions for the one-year period ended April 2026 totaled $1.20 per Class A Share.

On June 20, 2025, the Company renewed its at-market-program that allows the Company to issue shares of the Company to the public from time to time at the Company’s discretion, effective until July 19, 2027, unless terminated prior to such date by the Company. The maximum gross proceeds from the issuance of the shares will be $350,000,000.

As of May 15, 2026, the downside protection available to holders of the Preferred Shares improved to 47.9% from 35.5% as of April 30, 2025, and the asset coverage was at 1.9 times (x) whereas the projected dividend coverage declined to 0.6x. The dividend coverage below 1.0x indicates that the current dividend income earned by the Company is not enough to fully cover the Company’s operating expenses and targeted distributions on the Preferred Shares. To further supplement the Portfolio income, the Company may engage in covered call and put options writing on all or a portion of the shares held in the Portfolio and/ or rely on realized capital gains. Without giving consideration to capital appreciation potential or any source of income other than the dividends earned by the Portfolio, the Preferred Share distributions together with the current distributions on the Class A Shares will create a projected grind on the NAV of the Portfolio of approximately 5.8% per year over the next 5 years.

Considering the increase in the amount of downside protection available to holders of the Preferred Shares, dividend coverage below 1.0x, the Portfolio diversification and projected grind on the Portfolio, Morningstar DBRS upgraded the credit rating on the Preferred Shares to Pfd-3 from Pfd-3 (low).

The main constraints to the credit rating are as follows:

(1) Volatility of price and changes in the dividend policies of the underlying issuers may result in significant reductions in the Preferred Shares’ dividend coverage or downside protection from time to time.

(2) Dividends and interest received on the Portfolio are currently unable to fully cover distributions on the Preferred Shares.

(3) The Company relies on the Portfolio manager to generate additional income, through option writing, to meet distributions and other trust expenses without having to liquidate the portfolio’s securities.

(4) Stated monthly distributions on the Class A Shares will likely create a grind on the portfolio. This risk is mitigated by an asset coverage test of 1.5x that ensures sufficient levels of downside protection to the holders of the Preferred Shares.

Manulife Financial Corporation has announced:

the applicable dividend rates for its Non-cumulative Rate Reset Class 1 Shares Series 3 (the “Series 3 Preferred Shares”) (TSX: MFC.PR.F) and Non-cumulative Floating Rate Class 1 Shares Series 4 (the “Series 4 Preferred Shares”) (TSX: MFC.PR.P).

With respect to any Series 3 Preferred Shares that remain outstanding after June 19, 2026, 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 (the “Board”) of Manulife and subject to the provisions of the Insurance Companies Act (Canada). The dividend rate for the five-year period commencing on June 20, 2026, and ending on June 19, 2031, will be 4.64000% per annum or $0.290000 per share per quarter, being equal to the sum of the five-year Government of Canada bond yield as at May 21, 2026, plus 1.41%, as determined in accordance with the terms of the Series 3 Preferred Shares.

With respect to any Series 4 Preferred Shares that remain outstanding after June 19, 2026, holders thereof will be entitled to receive floating rate non-cumulative preferential cash dividends on a quarterly basis, calculated on the basis of actual number of days elapsed in each quarterly floating rate period divided by 365, as and when declared by the Board of Manulife and subject to the provisions of the Insurance Companies Act (Canada). The dividend rate for the three-month period commencing on June 20, 2026, and ending on September 19, 2026, will be 0.94092% (3.73300% on an annualized basis) or $0.235230 per share, being equal to the sum of the three-month Government of Canada Treasury bill yield as at May 21, 2026, plus 1.41%, as determined in accordance with the terms of the Series 4 Preferred Shares.

Beneficial owners of Series 3 Preferred Shares and Series 4 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 June 4, 2026. The news release announcing such conversion right was issued on May 4, 2026 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 (Canada), at 1‑800‑783‑9495.

MFC.PR.F was issued as a 4.20%+141 FixedReset that commenced trading 2011-3-11 after being announced 2011-3-7. Notice of extension was published in 2016 and the rate reset to 2.178%. I recommended that holders not convert to FloatingResets but there was a 21% conversion anyway. In 2021, the dividend rate on MFC.PR.F reset to 2.348% and there was a 3% net conversion to the FixedReset. Notice of extension was given in 2026.

MFC.PR.P is a FloatingReset, Bills+141bp, which arose via a partial conversion from MFC.PR.F in 2016.

DBRS has announced that it:

downgraded its credit rating on the Preferred Shares (the Preferred Shares) issued by Global Dividend Growth Split Corp. (the Company) to Pfd-3 from Pfd-3 (high). The rating downgrade reflects the completion of a stock split of the Class A Shares (Share Split), negative dividend coverage ratio, extension of term and a projected grind of 8.4% per year over the next five years. Brompton Funds Limited (Manager) is acting as the manager for the Company.

The Company invests in a portfolio of equity securities of large capitalization global dividend growth companies (the Portfolio). As of April 30, 2026, the Portfolio was invested in 35 equity securities across 11 different sectors, including information technology (20.1%), financials (17.7%), industrials (13.5%), healthcare (10.8%), consumer discretionary (7.7%), consumer staples (6.1%), energy (5.7%), materials (4.4%), real estate (4.4%), utilities (3.0%) and communication services (2.2%). To qualify for inclusion in the Portfolio, each global dividend growth company must have (1) a market capitalization of at least $10 billion and (2) a history of dividend growth or the potential for future dividend growth.

As of April 30, 2026, 90.0% of the Company’s net asset value was denominated in currencies other than Canadian dollars. The foreign currency exposure is substantially hedged back to the Canadian dollar. In addition to, or instead of, investing directly in equity securities of global dividend growth companies, the Company may invest a portion of the Portfolio’s assets in exchange-traded funds that provide exposure to global dividend growth companies, including exchange-traded funds managed by the Manager.

The current issued and outstanding Preferred Shares and Class A Shares have a maturity date of June 30, 2026. On August 12, 2025, the Company’s board of directors approved a 5-year extension, setting the maturity date to June 27, 2031. In connection with such extension, shareholders may retract their Preferred Shares or Class A Shares on June 30, 2026, pursuant to a special retraction right.

The holders of Preferred Shares are currently receiving fixed cumulative quarterly cash distributions of $0.125 (or $0.50 annually) per share, representing a 5.0% per annum return on the issue price of $10.00. The Company announced that the distribution rate of the Preferred Shares will increase to 6.20% for the extended term from July 1, 2026 to June 27, 2031.The holders of the Class A Shares receive regular monthly noncumulative distributions targeted to be $0.10 per Class A Share to yield 10.0% per annum on the issue price of $12.0. No monthly distributions to the Class A Shares will be made if (1) distributions to the Preferred Shares are in arrears or (2) in respect of a cash distribution, the net asset value (NAV) of the Company falls below 1.5 times (x) the principal amount of the outstanding Preferred Shares.

On April 27, 2026, the Company announced a Share Split, Class A shareholders of record at the close of business on May 11, 2026 received 15 additional Class A Shares for every 100 Class A Shares held. Class A shareholders will continue to receive the same regular monthly non-cumulative cash distributions (currently $0.10 per Class A Share) following the Share Split. As a result, the net asset value (NAV) per unit (one notional Unit: consists of one Preferred Share and one Class A Share) declined to $22.50 as of May 11, 2026 from $23.52 as of April 30, 2026.

The downside protection available to the Preferred Shares was 55.2% as of May 11, 2026. The dividend coverage has continued to deteriorate over the past three years, and is currently negative, at approximately -0.02x. The negative dividend coverage indicates that the current dividend income earned by the Company is not enough to fully cover the targeted distributions on the Preferred Shares, which increases the reliance on the Manager to generate a high yield to meet distributions and other expenses without having to liquidate portfolio securities. To supplement the Portfolio income, the Company may engage in securities lending or covered call and put options writing on all or a portion of the shares held in the Portfolio. Without giving consideration to capital appreciation potential or any source of income other than the dividends earned by the Portfolio, the Preferred Share distributions together with the current distributions on the Class A Shares will create a projected grind on the NAV of the Portfolio of approximately 8.4% per year over the remaining term. However, the grind in the portfolio is mitigated by a 1.5x NAV test.

Considering the level of downside protection, Share Split, negative dividend coverage ratio, extension of term and a projected grind of 8.4% per year over the next five years, Morningstar DBRS downgraded the credit rating on the Preferred Shares issued by the Company to Pfd-3 from Pfd-3 (high).

The main constraints on the credit rating are the following:

(1) Volatility in stock prices, along with changes in the dividend policies of the underlying issuers, may result in significant reductions in the Preferred Shares’ dividend coverage or downside protection from time to time.

(2) Dividends and interest received on the Portfolio are currently unable to fully cover distributions on the Preferred Shares.

(3) The Company relies on the Portfolio manager to generate additional income, through option writing, to meet distributions and other trust expenses without having to liquidate Portfolio securities.

(4) Stated monthly distributions on the Class A Shares will likely create a grind on the Portfolio. This risk is mitigated by an asset coverage test of 1.5x that ensures sufficient levels of downside protection to the holders of the Preferred Shares.

Morningstar DBRS’ credit ratings on the applicable classes address the credit risk associated with the identified financial obligations in accordance with the relevant transaction documents. Where applicable, a description of these financial obligations can be found in the transactions’ respective press releases at issuance.

The Capital Unit split and dividend reset was reported on PrefBlog.

Brompton Group has announced:

Brompton Energy Split Corp. (the “Fund”) is pleased to announce it is undertaking a treasury offering of class A and preferred shares (the “Class A Shares” and “Preferred Shares”, respectively) (the “Offering”).

The sales period for this offering is expected to end on Thursday, May 14, 2026. The offering is expected to close on or about May 22, 2026 and is subject to certain closing conditions including approval by the Toronto Stock Exchange (“TSX”).

The Class A Shares will be offered at a price of $7.95 per Class A Share for a distribution rate of 15.1% on the issue price.(1)(2) The Preferred Shares will be offered at a price of $10.25 per Preferred Share to yield 7.1%.(2) The closing price on the TSX for each of the Class A Shares and the Preferred Shares on May 12, 2026 were $8.09 and $10.30, respectively. The offering is being led by
RBC Capital Markets.

The investment objectives for the Class A Shares are to provide holders with regular monthly non-cumulative cash distributions and to provide holders of Class A Shares with the opportunity for growth in net asset value per Class A Share. Over the past 3 years, the Class A Share has generated a 37.1% per annum return.(2)

The investment objectives for the Preferred Shares are to provide holders with fixed cumulative preferential quarterly cash distributions, in the amount of $0.18125 per Preferred Share (7.25% per annum on the original $10.00 issue price), and to return the original issue price to holders of Preferred Shares on March 30, 2027. Over the past 3 years, the Preferred Share has generated an 8.0% per annum return.(2) Purchasers of Preferred Shares in this Offering will be eligible to receive the full June 2026 quarterly dividend of $0.18125 per Preferred Share when the dividend is declared.

The Fund invests in an actively managed Portfolio consisting primarily of equity securities of dividend-paying (at the time of investment) global energy issuers with a market capitalization of at least $2 billion (at the time of investment) which may include companies operating in energy subsectors and related industries such as oil and gas exploration and production, equipment, services, pipelines, transportation, infrastructure, utilities, among others. The Fund may also invest up to 25% of the value of the Portfolio, as measured at the time of investment, in equity securities of other global natural resource issuers which include companies that own, explore, mine, process or develop natural resource commodities or supply goods and services to those companies, including directly or indirectly through exchange-traded funds, including exchange traded funds managed by Brompton Funds Limited, the manager of the Fund.

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

Canadian Utilities Limited has announced:

CU Inc. announced today that it has notified the registered shareholder of its Cumulative Redeemable Preferred Shares Series 4 (“Series 4 Preferred Shares”) of a conversion privilege and applicable dividend rates. As a result, subject to certain conditions, the holders of Series 4 Preferred Shares will have the right to choose one of the following options with regard to their shares:

To retain any or all of their Series 4 Preferred Shares and continue to receive a fixed rate quarterly dividend; or
To convert, on a one-for-one basis, any or all of their Series 4 Preferred Shares into Cumulative Redeemable Preferred Shares Series 5 (“Series 5 Preferred Shares”) of CU Inc. and receive a floating rate quarterly dividend.
Effective June 1, 2026, the annual dividend rate for the Series 4 Preferred Shares is set at 4.573% for the five-year period from and including June 1, 2026 to but excluding June 1, 2031 and the Series 5 Preferred Shares floating quarterly dividend rate for the three-month period commencing June 1, 2026 to but excluding September 1, 2026 is set at an annual dividend rate of 3.646%. The dividend rate for the Series 5 Preferred Shares will be reset each quarter. Both rates were calculated according to the terms described in the short form prospectus of CU Inc. dated November 24, 2010.

Beneficial owners of Series 4 Preferred Shares who wish to exercise their right of conversion should communicate as soon as possible with their broker or other nominee and ensure that they follow their instructions in order to meet the deadline to exercise such right, which is 3 p.m. (Calgary time) / 5 p.m. (Toronto time) on May 19, 2026. Any notices received after this deadline will not be valid. As such, it is recommended that this be done well in advance of the deadline in order to provide the broker or other nominee with time to complete the necessary steps.

The foregoing conversions are subject to the conditions that: (i) if CU Inc. determines that there would be less than 1,000,000 Series 4 Preferred Shares outstanding on June 1, 2026, then all remaining Series 4 Preferred Shares will automatically be converted into Series 5 Preferred Shares on June 1, 2026, and (ii) alternatively, if CU Inc. determines that there would be less than 1,000,000 Series 5 Preferred Shares outstanding on June 1, 2026 after giving effect to conversion notices received, no Series 4 Preferred Shares will be converted into Series 5 Preferred Shares. If either of these scenarios occurs, CU Inc. will issue a news release to that effect on or before May 25, 2026.

Holders of the Series 4 Preferred Shares and the Series 5 Preferred Shares will have the opportunity to convert their shares again on June 1, 2031, and every five years thereafter as long as the shares remain outstanding.

For more information on the terms of, and risks associated with an investment in, the Series 4 Preferred Shares and the Series 5 Preferred Shares, please see CU Inc.’s short form prospectus dated November 24, 2010, which can be found under CU Inc.’s profile on SEDAR at www.sedarplus.ca.

CU Inc. is a wholly-owned subsidiary of Canadian Utilities Limited, an ATCO Company. CU Inc. is an Alberta-based corporation with approximately 3,600 employees and assets of $20 billion comprised of rate-regulated utility operations in electricity and natural gas distribution and transmission. More information about CU Inc. can be found on the Canadian Utilities Limited website at www.canadianutilities.com.

CIU.PR.C was issued as a 3.80%+136 FixedReset that commenced trading 2010-12-2 after being announced 2010-11-16. In 2016 it reset to 2.24% and there was no conversion to FloatingReset. In 2021 the issue reset to 2.29% and there was no conversion to the FloatingReset.

Thanks to Assiduous Readers earlyriser and HS for bringing this to my attention!

DBRS has announced that it:

changed the trends on Algonquin Power & Utilities Corp’s (APUC or the Company) credit ratings to Stable from Positive. Concurrently, Morningstar DBRS also confirmed APUC’s Issuer Rating at BBB and the credit rating on the Company’s Preferred Shares at Pfd-3.

KEY CREDIT RATING CONSIDERATIONS
APUC’s credit ratings are primarily based on the strength and stability of APUC’s subsidiary, Liberty Utilities Finance GP1 (LUF; rated BBB (high) with a Stable trend). LUF’s credit ratings are in turn based on the credit profile of Liberty Utilities Co. (LUCO), a fully regulated and diversified utility service provider. Morningstar DBRS based the credit rating confirmation on the strength and stability of LUCO’s business risk profile as a fully regulated and diversified utility service provider. LUCO’s business risk profile remained stable in 2025, underpinned by its (1) low-risk regulated asset base with reasonable regulatory frameworks across multiple jurisdictions and (2) geographically diversified portfolio with a reasonably sized customer base and large and growing rate base. The Company’s credit rating also incorporates the structural subordination of APUC’s debt to the debt of its subsidiaries.

The change in trends to Stable from Positive is concurrent with Morningstar DBRS’ credit rating actions on LUF. LUF’s capital investment plan between 2026 and 2028 is expected to require the issuance of additional debt such that its cash flow-to-debt ratio will remain less than the upgrade threshold of 15.0% over the forecast period. Additionally, upcoming maturities of $1.15 billion at APUC will likely be refinanced at LUCO. Nevertheless, Morningstar DBRS expects LUF’s cash flow-to-debt ratio to average around 12.0% over the forecast period, which is considered strong for the BBB (high) credit rating category, with adequate headroom to absorb any weakness.

There were no significant changes nor material adverse regulatory decisions in 2025 and year-to-date 2026 that affected LUCO’s credit profile. The Company achieved rate case settlements at various utilities including Empire District Electric Company; California–Liberty Utilities (CalPeco Electric) LLC; and New England Gas, which is expected to drive growth in earnings. The Company was also able to lower its operating expenses in 2025 through cost control measures and improve earned return of equity to 6.8% in 2025 (compared with 2024 at 5.5%).

CREDIT RATING DRIVERS
Morningstar DBRS could consider an upgrade if LUF gets upgraded and APUC maintains its financial risk profile. Conversely, APUC’s credit ratings could be downgraded if LUF’s credit ratings are downgraded or if APUC’s credit metrics weaken materially.

EARNINGS OUTLOOK
Morningstar DBRS expects APUC’s earnings to stabilize and be more predictable after the Company’s transition to a pure and fully regulated player. Morningstar DBRS also expects lower consolidated revenues from the sale of APUC’s renewable business (other than hydro) in 2025, offset by higher EBITDA margins driven by lower operating costs. Over time, Morningstar DBRS anticipates that APUC’s regulated businesses margins will strengthen as the Company continues to benefit from the implementation of higher approved rates and rate base year over year.

FINANCIAL OUTLOOK
APUC’s financial risk profile at year-end 2025 was strong, with actual debt-to-capital ratio less than the average of regulator-approved capital structure at the various regulated utilities. Morningstar DBRS expects cash flow from operations in 2026 to be modestly higher than in 2025 because of higher earnings. However, Morningstar DBRS expects the Company’s key credit metrics to modestly weaken as it raises additional debt to fund its capital investment plan over the next three years. Nevertheless, Morningstar DBRS expects the Company’s cash flow-to-debt ratio to average around 11.0% over the forecast period and stay supportive of the credit rating.

CREDIT RATING RATIONALE
APUC’s BBB Issuer Rating incorporates the business risk profile of its operating subsidiary, and APUC’s consolidated financial metrics, and the structural subordination of APUC to its operating subsidiary.

Comprehensive Business Risk Assessment (CBRA)
APUC’s CBRA of A/AL reflects its low business risk profile as a pure-play, distribution, transmission and generation business operating under an established and generally reasonable regulatory framework across multiple countries. The Company benefits from stable customer demand from its operating subsidiaries and minimal exposure to commodity or volume risk.

Comprehensive Financial Risk Assessment (CFRA)
APUC’s CFRA of AL/BBBH reflects its strong key credit metrics supported by reasonable leverage and adequate access to liquidity.

Intrinsic Assessment (IA)
The IA of BBBH is at the lower end of the IA range and is limited by LUF’s credit rating, given that APUC’s debt is structurally subordinate to debt at LUF. The IA assignment considers peer comparisons, among other factors.

Additional Considerations
APUC’s credit rating includes a negative adjustment for its structural subordination as the parent to its operating subsidiary.

Affected issues are AQN.PR.A and AQN.PR.D .

Mulvihill Capital Management Inc. has announced:

Premium Income Corporation (the “Fund”) is pleased to announce its intention to complete a share split of its class A shares (the “Share Split) due to the Fund’s strong performance. The holders of class A shares of record on the close of business on May 1, 2026 will receive 10 additional class A shares for every 100 Class A shares held, pursuant to the Share Split. The Share Split is subject to the approval by the Toronto Stock Exchange (the “TSX”).

As a result of the Share Split, the total dollar amount of distributions to be paid to the holders of Class A shares is expected to increase by approximately 10%.

The Class A shares are expected to commence trading on an ex-split basis at the opening of trading on May 1, 2026. 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 Split is a non-taxable event. The Share Split will be reflected in the net asset value per Class A share as of May 7, 2026.

For further information, please contact Investor Relations at 416.681.3966, toll free at 1.800.725.7172, email at info@mulvihill.com or visit www.mulvihill.com

PIC.PR.A was last mentioned on PrefBlog in 2024, when there was a big retraction.

PIC.PR.A has a par value of 15.00, with a total NAVPU (including the Capital Units, which will shortly be split) of 27.39 as of 2026-04-30.