Category: Issue Comments

BCE announced (on 2022-10-14):

Holders of fixed-rate BCE Inc. Series Z Preferred Shares have the right to convert all or part of their shares, effective on December 1, 2022, on a one-for-one basis into floating-rate Cumulative Redeemable First Preferred Shares, Series Y of BCE Inc. (the “Series Y Preferred Shares”). In order to convert their shares, holders must exercise their right of conversion during the conversion period which runs from October 17, 2022 until 5:00 p.m. (Eastern time) on November 17, 2022.
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As of December 1, 2022, the Series Z Preferred Shares, should they remain outstanding, 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 a fixed rate equal to the product of: (a) the yield to maturity compounded semi-annually (the “Government of Canada Yield”), computed on November 10, 2022 by two investment dealers appointed by BCE Inc., that would be carried by a non-callable Government of Canada bond with a 5-year maturity, multiplied by (b) the “Selected Percentage Rate”. The “Selected Percentage Rate” determined by BCE Inc. is 160%. The annual dividend rate applicable to the Series Z Preferred Shares will be published on November 15, 2022 in the national edition of The Globe and Mail, the Montreal Gazette and Le Devoir and will be posted on BCE Inc.’s website at www.bce.ca.

There was a similar announcement for BCE.PR.Y:

Holders of floating-rate BCE Inc. Series Y Preferred Shares have the right to convert all or part of their shares, effective on December 1, 2022, on a one-for-one basis into fixed-rate Cumulative Redeemable First Preferred Shares, Series Z of BCE Inc. (the “Series Z Preferred Shares”). In order to convert their shares, holders must exercise their right of conversion during the conversion period which runs from October 17, 2022 until 5:00 p.m. (Eastern time) on November 17, 2022.

Today the new dividend rate for BCE.PR.Z was announced:

BCE Inc. will, on December 1, 2022, continue to have Cumulative Redeemable First Preferred Shares, Series Z (“Series Z Preferred Shares”) outstanding if, following the end of the conversion period on November 17, 2022, BCE Inc. determines that at least one million Series Z Preferred Shares would remain outstanding. In such a case, as of December 1, 2022, the Series Z 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 a fixed rate equal to the product of: (a) the average of the yields to maturity compounded semi-annually, determined on November 10, 2022 by two investment dealers selected by BCE Inc., that would be carried by non-callable Government of Canada bonds with a 5-year maturity (the “Government of Canada Yield”), multiplied by (b) a percentage rate determined by BCE Inc. (the “Selected Percentage Rate”) for such period. The “Selected Percentage Rate” determined by BCE Inc. for such period is 160%. The “Government of Canada Yield” is 3.341%. Accordingly, the annual dividend rate applicable to the Series Z Preferred Shares for the period of five years beginning on December 1, 2022 will be 5.346%.

BCE.PR.Z reset to 4.331% in 2007; to 3.152% in 2012; and to 3.904% in 2017.

BCE.PR.Y is a ratchetRate preferred.

The terminology, mechanics and analysis of interconvertible shares of this type have been discussed on many occasions:

• Research : Preferred Pairs
• Pairs Equivalency Calculator
• Research : Preferred Share Interconvertibility (PrefLetter Version)
• Research : Interconvertibility Part 2

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

The Toronto-Dominion Bank has announced (on 2022-10-19):

that none of its 14 million Non-Cumulative 5-Year Rate Reset Preferred Shares, Series 16 (Non-Viability Contingent Capital (NVCC)) (the “Series 16 Shares”) will be converted on October 31, 2022 into Non-Cumulative Floating Rate Preferred Shares, Series 17 (NVCC) (the “Series 17 Shares”) of TD.

During the conversion period, which ran from October 3, 2022 to October 17, 2022, 131,188 Series 16 Shares were tendered for conversion into Series 17 Shares, which is less than the minimum 1,000,000 shares required to give effect to the conversion, as described in the prospectus supplement for the Series 16 Shares dated July 7, 2017. As a result, no Series 17 Shares will be issued on October 31, 2022 and holders of Series 16 Shares will retain their Series 16 Shares.

The Series 16 Shares are currently listed on the Toronto Stock Exchange under the symbol TD.PF.I. As previously announced on October 3, 2022, the dividend rate for the Series 16 Shares for the 5-year period from and including October 31, 2022 to but excluding October 31, 2027 will be 6.301%.

TD.PF.I was issued as a FixedReset, 4.50%+301, NVCC-compliant issue that commenced trading 2017-7-14 after being announced 2017-07-05. The issue reset to 6.301% in 2022. It is tracked by HIMIPref™ and is assigned to the FixedResets (Discount) subindex.

DBRS Limited has announced:

that, effective January 1, 2022, Real Estate & E-Commerce Split Corp. changed its name to Real Estate Split Corp.

DBRS Morningstar has also downgraded its rating on the Preferred Shares issued by Real Estate Split Corp. (the Company) to Pfd-3 (high) from Pfd-2 (low). The Preferred Shares have experienced a considerable reduction in downside protection since February 2022 as a result of the decline in the net asset value (NAV) of the portfolio in response to the broad stock market sell-off, which was triggered by the mix of the global high inflationary environment, tighter monetary policies, and various geopolitical events, such as the Russia-Ukraine war.

Considering a deterioration in downside protection (to 54.8% in November 2022 from 64.2% in November 2021), together with the increase in Class A shares distribution (to 10.4% on the original issue price of $15.0 from 8.0% in September 2021), the amount of grind present (6.8% per year over the remaining term), and the foreign-exchange risk exposure, DBRS Morningstar downgraded the rating on the Preferred Shares to Pfd-3 (high) from Pfd-2 (low).

The Company invests in a diversified portfolio composed of approximately 19 real estate issuers (the Portfolio) operating in the real estate or related sectors, including real estate investment trusts. The Portfolio may include securities denominated in currencies other than the Canadian dollar, exposing the Preferred Shares to foreign currency risk. The Company takes a tactical approach to determine whether to hedge the exposure to foreign currencies. The Company is managed by Middlefield Limited (the Manager).

Holders of the Preferred Shares receive quarterly fixed cumulative preferential cash distributions of $0.13125 (or $0.525 annually) per share, representing a 5.25% per-annum return on the original issue price of $10.00. The fixed distributions of dividends on the Preferred Shares are funded from the dividends received on the securities in the Portfolio, which cover approximately 1.4 times the annual Preferred Shares distributions. Holders of the Class A Shares receive regular monthly noncumulative distributions targeted to be $0.13 (or $1.56 annually) per Class A Share to yield 10.4% per annum on the original issue price of $15.00. Distributions to the Class A Shares were increased from the initial amount of $0.10 (or $1.20 annually) per Class A Share as of September 15, 2021. The Class A Share distributions are subject to the asset coverage test, which does not permit any distributions to holders of the Class A Shares if the Company’s NAV falls below $15.00 or if the dividends of the Preferred Shares are in arrears.

As of November 2, 2022, the downside protection available to the Preferred Shares was approximately 54.8%. Regular distributions to holders of the Class A Shares are projected to cause an average annual portfolio grind of about 6.8% over the remaining term. To supplement Portfolio income, the Manager may engage in covered call option writing on all, or a portion of the securities held in the Portfolio, engage in securities lending, or rely on realized capital gains.

The Company established a loan facility for working capital purposes, with the maximum amount of 5% of the total assets of the Company. The Company may pledge the Portfolio securities as collateral for amounts borrowed under the loan facility.

Recent Updates/Treasury Offerings

(i) On February 9, 2022
The company completed an overnight treasury offering of Class A Shares and Preferred Shares, raising approximately $16.3 million in gross proceeds. The Class A Shares were offered at a price of $19.10 per share for a distribution rate of 8.2% on the issue price, and the Preferred Shares were offered at a price of $10.55 per share for a yield to maturity of 5.0%.

(ii) On May 12, 2022
The company completed an overnight treasury offering of Class A Shares and Preferred Shares, raising approximately $15.2 million in gross proceeds. The Class A Shares were offered at a price of $18.00 per share for a distribution rate of 8.7% on the issue price, and the Preferred Shares were offered at a price of $10.10 per share for a yield to maturity of 5.2%.

(iii) On June 29, 2022
The company completed an overnight treasury offering of Class A Shares and Preferred Shares, raising approximately $10.1 million in gross proceeds. The Class A Shares were offered at a price of $15.30 per share for a distribution rate of 10.2% on the issue price, and the Preferred Shares were offered at a price of $10.12 per share for a yield to maturity of 5.2%.

(iv) On October 12, 2022
The company completed an overnight treasury offering of Class A Shares and Preferred Shares, raising approximately $11.8 million in gross proceeds. The Class A Shares were offered at a price of $14.40 per share for a distribution rate of 10.8% on the issue price, and the Preferred Shares were offered at a price of $9.80 per share for a yield to maturity of 5.4%.

A limited number of Class M Shares that rank junior to the Preferred Shares and Class A Shares in respect of capital upon the dissolution, winding up, or liquidation of the Company have been issued by the Company. There are currently $10 worth of such shares outstanding. The Class M Shares are not entitled to receive any dividends for as long as any Preferred Shares or Class A Shares are outstanding. Furthermore, no additional Class M Shares can be issued until the Preferred Shares and the Class A Shares have been retracted, redeemed, or purchased for cancellation.

The maturity date for both classes of shares is December 31, 2025. On maturity, the holders of the Preferred Shares will be entitled to the value of the Portfolio up to the face value of the Preferred Shares and any accrued but unpaid dividends in priority to the holders of the Class A Shares and the Class M Shares.

The main constraints to the rating are the following:

(1) Market fluctuations resulting from high inflation, interest rate hikes, oil prices, and global supply chain issues could further affect the Company’s NAV. The downside protection available to holders of the Preferred Shares depends on the value of the common shares held in the Portfolio.

(2) 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.

(3) Reliance on the manager to generate a high yield on the investment portfolio to meet distributions and other trust expenses without having to liquidate portfolio securities.

(4) The high concentration of the Portfolio in one industry (Real Estate).

(5) Potential foreign-exchange risk because the income received on the Portfolio is not hedged all the time.

The affected issue is RS.PR.A

TransAlta Corporation has announced (way back on 2022-9-21):

that after taking into account all election notices received for the conversion of the Cumulative Redeemable Rate Reset Preferred Shares, Series E (the “Series E Shares”) into Cumulative Redeemable Floating Rate Preferred Shares, Series F (the “Series F Shares”), there were only 89,945 Series E Shares tendered for conversion, which is less than the one million shares required to give effect to conversions into Series F Shares. As a result, none of the Series E Shares will be converted into Series F Shares on September 30, 2022.

TA.PR.H was issued as a FixedReset, 5.00%+365, that commenced trading 2012-8-10 after being announced 2012-8-2. It reset to 5.194% in 2017; I recommended against conversion; and there was no conversion. TA.PR.H reset to 6.894% in 2022. The issue is tracked by HIMIPref™ but has been assigned to the Scraps index on credit concerns.

DBRS has announced that it:

upgraded the ratings of Co-operators Financial Services Limited (CFSL or the Company), including its Issuer Rating, to BBB (high) from BBB. The ratings of Co-operators General Insurance Company (CGIC) were also upgraded, including its Financial Strength Rating, to “A” from A (low). Lastly, a Financial Strength Rating was assigned to Co-operators Life Insurance Company at “A.” The trends are all Stable.

KEY RATING CONSIDERATIONS
The ratings upgrades reflect the Company’s strong and consistent growth and improved underwriting profitability. While the Company’s strong 2021 performance was supported by extraordinarily favourable Canadian auto insurance results that benefitted from the pandemic, DBRS Morningstar views CFSL as well positioned to maintain adequate underwriting profitability going forward, which will allow it to fund its strategic initiatives.

The ratings and Stable trend reflect the Company’s prudent liquidity, leverage, and capital positions. Moreover, the franchise benefits from a diversified product offering, although its core property and casualty (P&C) business is by far the largest contributor to earnings. CFSL has been able to expand into new product lines, relying on its distribution strengths. The ratings also consider that the life insurance and wealth management businesses would benefit from additional scale to improve profitability.

RATING DRIVERS
Given the recent upgrades, further positive ratings movement is unlikely in the near term. Over the longer term, a significant improvement in profitability that includes a greater contribution from CFSL’s life insurance and asset management businesses would result in a ratings upgrade.

Conversely, a sustained deterioration in underwriting and overall profitability combined with lower capital levels would result in a ratings downgrade.

RATING RATIONALE
CFSL is one of Canada’s leading P&C insurers with a growing presence in life insurance, wealth, and asset management services. It has a resilient business model with solid brand recognition and access to multiple distribution channels, including proprietary agency and brokerage networks as well as a unique partnership with Canadian credit unions. CFSL is ranked fourth in the Canadian P&C insurance market and 14th in the life insurance market according to MSA Research 2021 direct written premium data. The Company continues to dedicate significant resources to strengthening its customer relationships through digitalization, client engagement, and advertising.

CFSL is exposed to a diversified portfolio of insurance risks, with individual P&C insurance being its largest exposure. Its investment portfolio is mainly composed of high-quality fixed-income assets but also includes sizable allocations to equities, preferred shares, and mortgages. CFSL has a comprehensive risk management and stress testing framework that it uses to set adequate risk limits consistent with its risk appetite. CFSL’s insurance operating subsidiaries maintain prudent reinsurance coverage, which mitigates large losses caused by catastrophic claims events.

CFSL has consistently grown revenues over the past five years, and earnings have benefitted. For 2021, the Company reported record earnings of $477 million and a return on average shareholders’ equity of 13.1%, reflecting strong financial markets and favourable P&C claims experience. In 2022, financial market volatility and rising interest rates have affected profitability with net income decreasing to $86 million for H1 2022 from $476 million in H1 2021. Going forward, the Company is expected to maintain adequate underwriting profitability and is also likely to be affected by any further financial market volatility.

CFSL has a healthy liquidity position with a large buffer of highly liquid assets in excess of its liquidity requirements. It has a $98 million undrawn credit facility and has surplus capital held at the holding company level, which is invested in liquid assets and is sufficient to cover the principal of its senior debentures.

CFSL maintains adequate capital buffers in its insurance subsidiaries with the minimal capital test ratio of its P&C subsidiary at 219% and the life insurance capital adequacy test ratio of its life subsidiary at 152% at Q2 2022; both are well above regulatory targets of 150% and 100%, respectively. These capital ratios have declined since YE2021 because of rising interest rates and equity market declines in the first half of the year. CFSL’s consolidated financial leverage ratio (including preferred shares of CGIC) was 12.3% as at Q2 2022, which is conservative. The Company’s earnings are sufficient to easily cover interest payments on its debt.

The affected issue is CCS.PR.C.

National Bank of Canada has announced:

the dividend rates applicable to the Non-Cumulative 5-Year Rate Reset First Preferred Shares, Series 38 Non-Viability Contingent Capital (NVCC) (the “Series 38 Shares”) and the Non-Cumulative Floating Rate First Preferred Shares, Series 39 (NVCC) (the “Series 39 Shares”).

Holders of Series 38 Shares, should any remain outstanding after November 15, 2022, 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 the Bank and subject to the provisions of the Bank Act (Canada). The dividend rate for the five-year period commencing on November 16, 2022, and ending on November 15, 2027, will be 7.027% being equal to the sum of the five-year Government of Canada Bond yield (3.597%) plus 3.43%, as determined in accordance with the terms of the Series 38 Shares.

Holders of Series 39 Shares, should any be issued on November 15, 2022, will be entitled to receive floating rate non-cumulative preferential cash dividends on a quarterly basis, as and when declared by the Board of Directors of the Bank and subject to the provisions of the Bank Act (Canada). The dividend rate for the three-month period commencing on November 16, 2022, and ending on February 15, 2023, will be 7.256%, being equal to the sum of the 90-day Government of Canada Treasury Bill yield (3.826%) plus 3.43%, calculated on the basis of actual number of days elapsed in such quarterly floating rate period divided by 365, as determined in accordance with the terms of the Series 39 Shares.

Holders of the Series 38 Shares have, subject to certain conditions, the right to convert all or part of their Series 38 Shares on a one-for-one basis into Series 39 Shares on November 15, 2022.

Beneficial owners of Series 38 shares who wish to exercise their conversion right 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 October 31, 2022, at 5:00 p.m. (EDT).

NA.PR.C is a FixedReset, 4.45%+343, NVCC-compliant, that commenced trading 2017-6-13 after being announced 2017-6-1. Notice of extension was given in 2022. It is tracked by HIMIPref™ and has been assigned to the FixedResets (Discount) subindex.

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

Pembina Pipeline Corporation has announced:

its intention to redeem its issued and outstanding Cumulative Redeemable Minimum Rate Reset Class A Preferred Shares, Series 23 (“Series 23 Shares”) (TSX: PPL.PF.C) on November 15, 2022 (the “Redemption Date”).

Pembina intends to redeem all of its 12,000,000 issued and outstanding Series 23 Shares, in accordance with the terms of the Series 23 Shares, as set out in the Company’s articles of amendment dated December 16, 2019, on the Redemption Date for a redemption price equal to $25.00 per Series 23 Share (the “Redemption Price”), less any tax required to be deducted or withheld by the Company. The total redemption price to Pembina will be $300 million.

As previously announced, the dividend payable on November 15, 2022, to holders of the Series 23 Shares of record on October 31, 2022, will be $0.328125 per Series 23 Share. This will be the final quarterly dividend on the Series 23 Shares. Upon payment of the November 15, 2022, dividend, there will be no accrued and unpaid dividends on the Series 23 Shares as at the Redemption Date.

The Company has provided notice today of the Redemption Price and the Redemption Date to the sole registered holder of the Series 23 Shares in accordance with the terms of the Series 23 Shares, as set out in the Company’s articles of amendment dated December 16, 2019. For non-registered holders of Series 23 Shares, no further action is required however, they should contact their broker or other intermediary with any questions regarding the redemption process for the Series 23 Shares in which they hold a beneficial interest. The Company’s transfer agent for the Series 23 Shares is Computershare Investor Services Inc. Questions regarding the redemption process may also be directed to Computershare at 1-800-564-6253 or by email to corporateactions@computershare.com.

PPL.PF.C was originally issued as KML.PR.A; the ticker changed in December, 2019. KML.PR.A was a FixedReset 5.25%+365M525 that commenced trading 2017-8-15 after being announced 2017-8-3. It has been tracked by HIMIPref™ but relegated to the Scraps – FixedReset Discount subindex on credit concerns. There was some, although not universal, expectation of redemption; PPL.PF.C was yielding significantly less than its peers at today’s closing quote of 24.05-20; however, the low yield may be more reflective of the Minimum Rate Guarantee than of redemption expectations.

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

DBRS has announced that it:

changed the trend to Positive from Stable, and confirmed all ratings of Intact Financial Corporation (Intact or the Company) and its operating insurance subsidiaries, including the Financial Strength Rating (FSR) of its main operating insurance subsidiaries at AA (low) and Intact’s “A” Issuer Rating. The trend on the ratings of RSA Insurance Group Limited, Intact’s UK-based subsidiary, was also changed to Positive (see “DBRS Morningstar Changes Trend on RSA Insurance Group Limited and its Operating Entities to Positive from Stable; Confirms Financial Strength Ratings at AA (low)”).
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The Company’s risk profile reflects its prudent approach to risk management, and its high-quality investment portfolio is based on a high proportion of readily marketable bonds and equities. Derivatives are utilized strictly for hedging purposes. Intact’s approach to managing its investment portfolio has allowed it to earn significant investment returns over the years and to withstand market volatility reasonably well. The commercial products portfolio is well diversified, but DBRS Morningstar notes that it is exposed to systemic risk arising from its cyber insurance offerings. In addition to traditional catastrophic risk exposures, which it mitigates primarily through reinsurance and policy terms and conditions, the Company has undertaken actions to reduce its earthquake risk exposure in Canada, which DBRS Morningstar views positively.

Intact’s earnings ability reflects its strong underwriting and pricing discipline across its business segments and geographies, combined with solid revenue generation from its distribution businesses. The Company’s net earnings have proven to be strong and resilient over time with a very good combined ratio of 90%, based on a three-year weighted average, as calculated by DBRS Morningstar.

The Company maintains ample liquidity resources to deal with potential cash demands under reasonably severe stress scenarios. Its investment portfolio consists of a high proportion of marketable bonds and equities, in addition to its substantial cash and short-term investment holdings. Reinsurance cover is available to limit the impact of losses that exceed retention thresholds.

Intact’s regulatory capital ratios for its standalone entities reflect appropriate buffers above required solvency levels, allowing the Company to handle reasonably adverse events. Fixed charge coverage ratios are high as a result of Intact’s consistently strong net earnings. Financial leverage has also returned to its pre-acquisition level.

Affected issues are IFC.PR.A, IFC.PR.C, IFC.PR.E, IFC.PR.F, IFC.PR.G, IFC.PR.I and IFC.PR.K.

National Bank of Canada has announced:

that it does not intend to exercise its right to redeem all or part of the currently outstanding 16,000,000 Series 38 Shares on November 15, 2022. As a result, subject to certain conditions, the holders of the Series 38 Shares have the right to convert all or part of their Series 38 Shares on a one-for-one basis into Non-Cumulative Floating Rate First Preferred Shares, Series 39 (NVCC) (the “Series 39 Shares”) on November 15, 2022, in accordance with the terms of the Series 38 Shares described in the prospectus supplement dated June 5, 2017.

Holders who do not exercise their right to convert their Series 38 Shares into Series 39 Shares on November 15, 2022, will retain their Series 38 Shares.

The foregoing conversions are subject to the conditions that: (i) if National Bank determines that there would remain outstanding on November 15, 2022, less than 1,000,000 Series 39 Shares, after having taken into account all Series 38 Shares tendered for conversion into Series 39 Shares, then holders of Series 38 Shares will not be entitled to convert their shares into Series 39 Shares, and (ii) alternatively, if National Bank determines that there would remain outstanding on November 15, 2022, less than 1,000,000 Series 38 Shares, after having taken into account all Series 38 Shares tendered for conversion into Series 39 Shares, then all remaining Series 38 Shares will automatically be converted into Series 39 Shares without the consent of the holders on November 15, 2022.

In either case, National Bank shall give a notice to that effect to all registered holders of Series 38 Shares no later than November 8, 2022.

On October 17, 2022, National Bank will give notice of:

i. the annual fixed dividend rate applicable to the Series 38 Shares to which a holder of Series 38 Shares will be entitled for the 5-year period from November 16, 2022, up to and including November 15, 2027; and

ii. the floating quarterly dividend rate applicable to the Series 39 Shares to which a holder of Series 39 Shares will be entitled for the 3-month period from November 16, 2022, up to and including February 15, 2023.

Beneficial owners of Series 38 shares who wish to exercise their conversion right should communicate with their broker or other nominee to obtain instructions for exercising such right during the conversion period, which will run from October 17, 2022, until October 31, 2022, at 5:00 p.m. (EDT).

NA.PR.C is a FixedReset, 4.45%+343, NVCC-compliant, that commenced trading 2017-6-13 after being announced 2017-6-1. It is tracked by HIMIPref™ and has been assigned to the FixedResets (Discount) subindex.

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

The Toronto-Dominion Bank has announced:

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 16 (Non-Viability Contingent Capital (NVCC)) (the “Series 16 Shares”) of TD on October 31, 2022. As a result, and subject to certain conditions set out in the prospectus supplement dated July 7, 2017 relating to the issuance of the Series 16 Shares, the holders of the Series 16 Shares have the right to convert all or part of their Series 16 Shares, on a one-for-one basis, into Non-Cumulative Floating Rate Preferred Shares, Series 17 (NVCC) (the “Series 17 Shares”) of TD on October 31, 2022. Holders who do not exercise their right to convert their Series 16 Shares into Series 17 Shares on such date will continue to hold their Series 16 Shares.

The foregoing conversion right is subject to the conditions that: (i) if TD determines that there would be less than 1,000,000 Series 17 Shares outstanding after taking into account all shares tendered for conversion on October 31, 2022, then holders of Series 16 Shares will not be entitled to convert their shares into Series 17 Shares, and (ii) alternatively, if TD determines that there would remain outstanding less than 1,000,000 Series 16 Shares after taking into account all shares tendered for conversion on October 31, 2022, then all remaining Series 16 Shares will automatically be converted into Series 17 Shares on a one-for-one basis on October 31, 2022. In either case, TD will give written notice to that effect to holders of Series 16 Shares no later than October 24, 2022.

The dividend rate applicable to the Series 16 Shares for the 5-year period from and including October 31, 2022 to but excluding October 31, 2027 is 6.301%. The dividend rate applicable to the Series 17 Shares for the 3-month period from and including October 31, 2022 to but excluding January 31, 2023, is 6.662%.

Beneficial owners of Series 16 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 the date hereof until 5:00 p.m. (Toronto time) on October 17, 2022.

TD.PF.I was issued as a FixedReset, 4.50%+301, NVCC-compliant issue that commenced trading 2017-7-14 after being announced 2017-07-05. It is tracked by HIMIPref™ and is assigned to the FixedResets (Discount) subindex.

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