Category: Issue Comments

BCE Inc. has announced (on 2023-1-13):

Holders of fixed-rate BCE Inc. Series AC Preferred Shares have the right to convert all or part of their shares, effective on March 1, 2023, on a one-for-one basis into floating-rate Cumulative Redeemable First Preferred Shares, Series AD of BCE Inc. (the “Series AD Preferred Shares”). In order to convert their shares, holders must exercise their right of conversion during the conversion period which runs from January 15, 2023 until 5:00 p.m. (Eastern time) on February 20, 2023.
…
As of March 1, 2023, the Series AC 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 determined by BCE Inc. on February 6, 2023 but which shall not be less than 80% of the five-year Government of Canada Yield (as defined in BCE Inc.’s articles) compounded semi-annually and computed on February 6, 2023 by two investment dealers appointed by BCE Inc. The annual dividend rate applicable to the Series AC Preferred Shares will be published on February 8, 2023 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.

With respect to BCE.PR.D, they announced:

Holders of floating-rate BCE Inc. Series AD Preferred Shares have the right to convert all or part of their shares, effective on March 1, 2023, on a one-for-one basis into fixed-rate Cumulative Redeemable First Preferred Shares, Series AC of BCE Inc. (the “Series AC Preferred Shares”). In order to convert their shares, holders must exercise their right of conversion during the conversion period which runs from January 15, 2023 until 5:00 p.m. (Eastern time) on February 20, 2023.
…
In order to exercise their conversion right in respect of all or part of their Series AD Preferred Shares, registered holders must provide a written notice thereof, accompanied by their Series AD Preferred Share certificates with the transfer form on the back thereof or other appropriate stock transfer power of attorney duly endorsed, and deliver them, at the latest by 5:00 p.m. (Eastern time) on February 20, 2023, to one of the following addresses of TSX Trust Company:…
…
As of March 1, 2023, the Series AD Preferred Shares, should they remain outstanding, will continue to pay a monthly floating dividend based on a dividend rate that will fluctuate over time between 50% and 100% of the Prime rate (“Prime”) for each month computed in accordance with the articles of BCE Inc. Accordingly, from March 1, 2023, the holders of Series AD Preferred Shares will continue to be entitled to receive floating adjustable cash dividends, as and when declared by the Board of Directors of BCE Inc., to be paid on the twelfth day of the subsequent month. The dividend rate will be adjusted upwards or downwards on a monthly basis by an Adjustment Factor (as described below) whenever the Calculated Trading Price, being the market price of the Series AD Preferred Shares computed in accordance with the articles of BCE Inc., is $24.875 or less or $25.125 or more, respectively. …

They have now announced:

BCE Inc. will, on March 1, 2023, continue to have Cumulative Redeemable First Preferred Shares, Series AC (“Series AC Preferred Shares”) outstanding if, following the end of the conversion period on February 20, 2023, BCE Inc. determines that at least 2,500,000 Series AC Preferred Shares would remain outstanding. In such a case, as of March 1, 2023, the Series AC 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 an annual fixed dividend rate equal to 5.08%

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%. I recommended conversion.

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

Thanks to Assiduous Reader newbiepref for bringing this to my attention

DBRS has announced that it:

has placed the ratings of TC Energy Corporation (TCC or the Company), TransCanada PipeLines Limited (TCPL; TCC’s wholly owned subsidiary), Nova Gas Transmission Limited (NGTL), and Trans Québec & Maritimes Pipeline Inc. (TQM) Under Review with Negative Implications. The ratings of NGTL and TQM are based on the ratings of TCPL. The rating actions follow the updated cost estimate of $14.5 billion (previously $ 11.2 billion) provided by the Company for the Coastal GasLink Project (the Project) with a potential for additional increases of $1.2 billion if construction extends well into 2024. While the Company is pursuing cost mitigants and recoveries, the process is unlikely to be completed before the Project is placed in service. DBRS Morningstar considers the increase in Project cost to be credit negative as the costs are materially higher than DBRS Morningstar’s previous expectation and will have to be fully borne by TCC through the construction period.

DBRS Morningstar’s ratings on TCC and TCPL are based on the expectation that TCC will maintain its overall financial risk profile in the “A” rating category. However, the increase in Project cost has reduced the Company’s financial flexibility, and TCC will have to depend on the successful execution of its proposed asset divestiture program to bridge the funding gap and maintain its financial risk profile. While the Company has an extensive portfolio of contracted assets with stable cash flows that could be monetized, the size of the divestiture program does entail execution and timing risks. In addition, the impact of the asset sales on cash flow and possibly the Company’s business risk profile is uncertain at this time.

DBRS Morningstar expects to resolve the Under Review Status after reviewing the Company’s updated financing plan and having more certainty with regard to the scope of the asset divestiture program. Despite the increase in Project cost, TCC’s rating is underpinned by its strong business risk profile, and DBRS Morningstar expects any negative rating action to likely be limited at most to one notch lower from the current ratings.

This follows the S&P announcement of 2023-2-1:

• TC Energy Corp. (TC) recently announced an updated cost estimate for its Coastal GasLink project. The increase of approximately C$3.3 billion will bring the estimated total cost of the project to C$14.5 billion. The increased project cost, to be realized over the remainder of construction, is in addition to the C$9.5 billion in 2023 capital expenditure (capex) that the company announced in November 2022.
• TC has indicated that it is committed to asset sales to fully fund its capital program and the increased costs of Coastal GasLink Project; however, the timing of these sales and the net impact on leverage and EBITDA are uncertain at this time.
• As a result, S&P Global Ratings revised the outlook to negative from stable and affirmed its ‘BBB+’ issuer credit rating on TC.
• The negative outlook indicates the uncertainty regarding the timing and amount of the anticipated asset sales necessary to ensure the company can achieve a debt-to-EBITDA ratio of less than 5.0x, consistent with the rating.

…
The negative outlook reflects the uncertainty regarding any asset sales in support of the company’s announced capital program as well as the increased costs at the Coastal GasLink project. Although we believe TC has assets that would be attractive to potential purchasers, it is not clear as to the impact on business risk of such sales or whether the ultimate amount and EBITDA impact of such sales will allow the company to reduce its leverage consistent with the rating. Based on our base-case assumption, we forecast debt to EBITDA of about 5.4x in 2023 and 5x in 2024.

We could lower the rating if we believe that the asset sales net of any EBITDA impact will not be sufficient to offset the company’s increased capex, including the higher costs at the Coastal GasLink project or any of the other projects, such that debt to EBITDA will remain above 5.0x or FFO-to-Debt will fall below 13% on a consistent basis.

We could revise the outlook to stable if we believe the company has undertaken sufficient asset sales or other credit positive measures such that debt to EBITDA will remain below 5.0x and FFO-to-debt will remain above 13% on a consistent basis.

Affected issues are TRP.PR.A, TRP.PR.B, TRP.PR.C, TRP.PR.D, TRP.PR.E, TRP.PR.F, TRP.PR.G, TRP.PR.H and TRP.PR.I.

Pembina Pipeline Corporation has announced (on 2023-1-31):

that none of Pembina’s Cumulative Redeemable Minimum Rate Reset Class A Preferred Shares, Series 25 (“Series 25 Shares”) (TSX: PPL.PF.E) will be converted into Cumulative Redeemable Floating Rate Class A Preferred Shares, Series 26 of Pembina (“Series 26 Shares”) on February 15, 2023.

After taking into account all the conversion notices received from holders of its outstanding Series 25 Shares by the January 31, 2023 deadline for the conversion of the Series 25 Shares into Series 26 Shares, less than the 1,000,000 Series 25 Shares required to give effect to conversions into Series 26 Shares were tendered for conversion.

PPL.PF.E was issued as KML.PR.C, a FixedReset, 5.20%+351M520, that commenced trading 2017-12-15 after being announced 2017-12-6. A Plan of Arrangement was announced in August 2019 and a vote by preferred shareholders was made explicit in September 2019. The ticker changed in late 2019. The shares reset to 6.481% in 2023.

Pembina Pipeline Corporation has announced:

that it does not intend to exercise its right to redeem the currently outstanding Cumulative Redeemable Minimum Rate Reset Class A Preferred Shares, Series 21 (“Series 21 Shares”) (TSX: PPL.PF.A) on March 1, 2023.

As a result of the decision not to redeem the Series 21 Shares, and subject to certain terms of the Series 21 Shares, the holders of the Series 21 Shares will have the right to elect to convert all or part of their Series 21 Shares on a one-for-one basis into Cumulative Redeemable Floating Rate Class A Preferred Shares, Series 22 of Pembina (“Series 22 Shares”) on March 1, 2023 (the “Conversion Date”). Holders who do not exercise their right to convert their Series 21 Shares into Series 22 Shares will retain their Series 21 Shares.

As provided in the terms of the Series 21 Shares: (i) if Pembina determines that there would remain outstanding immediately following the conversion less than 1,000,000 Series 21 Shares, then all remaining Series 21 Shares will be automatically converted into Series 22 Shares on a one-for-one basis effective as of the Conversion Date; or (ii) if Pembina determines that there would be less than 1,000,000 Series 22 Shares outstanding immediately following the conversion, no Series 21 Shares will be converted into Series 22 Shares on the Conversion Date. There are currently 16,000,000 Series 21 Shares outstanding.

With respect to any Series 21 Shares that remain outstanding after the Conversion Date, holders thereof will be entitled to receive quarterly fixed cumulative preferential cash dividends, if, as and when declared by the Board of Directors of Pembina. The annual dividend rate for the Series 21 Shares for the five-year period from and including March 1, 2023, to, but excluding, March 1, 2028, will be 6.302 percent, being equal to the five-year Government of Canada bond yield of 3.042 percent determined as of today plus 3.26 percent, in accordance with the terms of the Series 21 Shares.

With respect to any Series 22 Shares that may be issued on the Conversion Date, holders thereof will be entitled to receive quarterly floating rate cumulative preferential cash dividends, if, as and when declared by the Board of Directors of Pembina. The annual dividend rate applicable to the Series 22 Shares for the three-month floating rate period from and including March 1, 2023, to, but excluding, June 1, 2023, will be 7.706 percent, being equal to the annual rate of interest for the most recent auction of 90-day Government of Canada treasury bills of 4.446 percent plus 3.26 percent, in accordance with the terms of the Series 22 Shares (the “Floating Quarterly Dividend Rate”). The Floating Quarterly Dividend Rate will be reset on the first day of March, June, September and December in each year.

Beneficial holders of Series 21 Shares who wish to exercise their right of conversion during the conversion period, which runs from January 30, 2023, until 3:00 pm (MT) / 5:00 pm (ET) on February 14, 2023, should communicate as soon as possible with their broker or other intermediary for more information. It is recommended that this be done well in advance of the deadline in order to provide the broker or other intermediary with the time to complete the necessary steps. Any notices received after this deadline will not be valid.

As previously announced, the dividend payable on March 1, 2023, to holders of the Series 21 Shares of record on February 1, 2023, will be $0.30625 per Series 21 Share, consistent with the dividend rate in effect since the issuance of the Series 21 Shares. For more information on the terms of the Series 21 Shares and the Series 22 Shares, please see the prospectus supplement dated November 30, 2017, which can be found on SEDAR at www.sedar.com.

PPL.PF.A was issued as a FixedReset 4.90%+326M490 that commenced trading 2017-12-7 after being announced 2017-11-28. It is tracked by HIMIPref™, but has been relegated to the Scraps – FixedResets (Discount) subindex on credit concerns.

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

Update, 2024-12-9: There was a partial conversion to the FloatingReset, PPL.PF.B, announced 2023-2-14:

Pembina Pipeline Corporation (“Pembina”) (TSX: PPL; NYSE: PBA) announced today that holders of an aggregate of 1,028,130 of its 16,000,000 Cumulative Redeemable Minimum Rate Reset Class A Preferred Shares, Series 21 (“Series 21 Shares”) have elected to convert, on a one-for-one basis, their Series 21 Shares into Cumulative Redeemable Floating Rate Class A Preferred Shares, Series 22 of Pembina (“Series 22 Shares”). As a result of the exercise of such conversion rights, on March 1, 2023, Pembina will have 14,971,870 Series 21 Shares and 1,028,130 Series 22 Shares issued and outstanding. The Series 21 Shares and the Series 22 Shares will be listed on the Toronto Stock Exchange under the symbols PPL.PF.A and PPL.PF.B, respectively.

The asynchronous redemption of PPL.PF.B was announced 2024-12-9.

Enbridge Inc. has announced:

that it does not intend to exercise its right to redeem its currently outstanding Cumulative Redeemable Preference Shares, Series D (Series D Shares) (TSX: ENB.PR.D) on March 1, 2023. As a result, subject to certain conditions, the holders of the Series D Shares have the right to convert all or part of their Series D Shares on a one-for-one basis into Cumulative Redeemable Preference Shares, Series E of Enbridge (Series E Shares) on March 1, 2023. Holders who do not exercise their right to convert their Series D Shares into Series E Shares will retain their Series D Shares.

The foregoing conversion right is subject to the conditions that: (i) if Enbridge determines that there would be less than 1,000,000 Series D Shares outstanding after March 1, 2023, then all remaining Series D Shares will automatically be converted into Series E Shares on a one-for-one basis on March 1, 2023; and (ii) alternatively, if Enbridge determines that there would be less than 1,000,000 Series E Shares outstanding after March 1, 2023, no Series D Shares will be converted into Series E Shares. There are currently 18,000,000 Series D Shares outstanding.

With respect to any Series D Shares that remain outstanding after March 1, 2023, holders thereof will be entitled to receive quarterly fixed cumulative preferential cash dividends, as and when declared by the Board of Directors of Enbridge. The new annual dividend rate applicable to the Series D Shares for the five-year period commencing on March 1, 2023 to, but excluding, March 1, 2028 will be 5.412 percent, being equal to the five-year Government of Canada bond yield of 3.042 percent determined as of today plus 2.37 percent in accordance with the terms of the Series D Shares.

With respect to any Series E Shares that may be issued on March 1, 2023, holders thereof will be entitled to receive quarterly floating rate cumulative preferential cash dividends, as and when declared by the Board of Directors of Enbridge. The dividend rate applicable to the Series E Shares for the three-month floating rate period commencing on March 1, 2023 to, but excluding, June 1, 2023 will be 1.71901 percent, based on the annual rate on three month Government of Canada treasury bills for the most recent treasury bills auction of 4.45 percent plus 2.37 percent in accordance with the terms of the Series E Shares (the Floating Quarterly Dividend Rate). The Floating Quarterly Dividend Rate will be reset every quarter.

Beneficial holders of Series D Shares who wish to exercise their right of conversion during the conversion period, which runs from January 30, 2023 until 5:00 p.m. (EST) on February 14, 2023, should communicate as soon as possible with their broker or other intermediary for more information. It is recommended that this be done well in advance of the deadline in order to provide the broker or other intermediary time to complete the necessary steps. Any notices received after this deadline will not be valid.

ENB.PR.D is a FixedReset, 4.00%+237, that commenced trading 2011-11-23 after being announced 2011-11-14. It reset to 4.46% in 2018; I recommended against conversion; and there was no conversion. The issue is tracked by HIMIPref™ but relegated to the Scraps – FixedReset (Discount) subindex due to credit concerns.

Thanks to Assiduous Readers niagara and Fuzzybear for bringing this to my attention!

Enbridge Inc. has announced:

that it does not intend to exercise its right to redeem its currently outstanding Cumulative Redeemable Minimum Rate Reset Preference Shares, Series 19 (Series 19 Shares) (TSX: ENB.PF.K) on March 1, 2023. As a result, subject to certain conditions, the holders of the Series 19 Shares have the right to convert all or part of their Series 19 Shares on a one-for-one basis into Cumulative Redeemable Preference Shares, Series 20 of Enbridge (Series 20 Shares) on March 1, 2023. Holders who do not exercise their right to convert their Series 19 Shares into Series 20 Shares will retain their Series 19 Shares.

The foregoing conversion right is subject to the conditions that: (i) if Enbridge determines that there would be less than 1,000,000 Series 19 Shares outstanding after March 1, 2023, then all remaining Series 19 Shares will automatically be converted into Series 20 Shares on a one-for-one basis on March 1, 2023; and (ii) alternatively, if Enbridge determines that there would be less than 1,000,000 Series 20 Shares outstanding after March 1, 2023, no Series 19 Shares will be converted into Series 20 Shares. There are currently 20,000,000 Series 19 Shares outstanding.

With respect to any Series 19 Shares that remain outstanding after March 1, 2023, holders thereof will be entitled to receive quarterly fixed cumulative preferential cash dividends, as and when declared by the Board of Directors of Enbridge. The new annual dividend rate applicable to the Series 19 Shares for the five-year period commencing on March 1, 2023 to, but excluding, March 1, 2028 will be 6.212 percent, being equal to the five-year Government of Canada bond yield of 3.042 percent determined as of today plus 3.17 percent in accordance with the terms of the Series 19 Shares.

With respect to any Series 20 Shares that may be issued on March 1, 2023, holders thereof will be entitled to receive quarterly floating rate cumulative preferential cash dividends, as and when declared by the Board of Directors of Enbridge. The dividend rate applicable to the Series 20 Shares for the three-month floating rate period commencing on March 1, 2023 to, but excluding, June 1, 2023 will be 1.92066 percent, based on the annual rate on three month Government of Canada treasury bills for the most recent treasury bills auction of 4.45 percent plus 3.17 percent in accordance with the terms of the Series 20 Shares (the Floating Quarterly Dividend Rate). The Floating Quarterly Dividend Rate will be reset every quarter.

Beneficial holders of Series 19 Shares who wish to exercise their right of conversion during the conversion period, which runs from January 30, 2023 until 5:00 p.m. (EST) on February 14, 2023, should communicate as soon as possible with their broker or other intermediary for more information. It is recommended that this be done well in advance of the deadline in order to provide the broker or other intermediary time to complete the necessary steps. Any notices received after this deadline will not be valid.

ENB.PF.K was issued as a FixedReset 4.90%+317M490 that commenced trading 2017-2-11 after being announced 2017-12-4. It has been added to the HIMIPref™ database but has been relegated to the Scraps subindex on credit concerns.

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

Brompton Funds has announced:

As previously announced, the board of directors of Brompton Oil Split Corp. (the “Fund”) determined that it would extend the maturity date of the class A and preferred shares of the Company. Today, the board of directors announces that the new term of the Fund will be 1 year to March 28, 2024. In addition, the distribution rate for the preferred shares (the “Preferred Shares”) for the new term from March 31, 2023 to March 28, 2024 has been increased to $0.80 per Preferred Share per annum (8.0% on the original issue price of $10) payable quarterly. The new Preferred Share distribution rate is based on current market rates for preferred shares with similar terms. In addition, the Fund intends to maintain the targeted monthly Class A Share distribution rate at $0.10 per Class A Share.

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. The Manager believes that the Fund’s strategy is well positioned to participate in opportunities that are expected to continue in the energy sector.

In connection with the extension, shareholders who do not wish to continue their investment in the Fund, will be able to retract Preferred Shares or Class A Shares on March 30, 2023 pursuant to a special retraction right and receive a retraction price that is calculated in the same way that such price would be calculated if the Fund were to terminate on March 30, 2023. Pursuant to this option, the retraction price may be less than the market price if the security is trading at a premium to net asset value. To exercise this retraction right, shareholders must provide notice to their investment dealer by February 28, 2023 at 5:00 p.m. (Toronto time). Alternatively, shareholders may sell their Preferred Shares and/or Class A Shares through their securities dealer for the market price at any time, potentially at a higher price than would be achieved through retraction, or shareholders may take no action and continue to hold their shares.

Thanks to Assiduous Reader RAV4guy for bringing this to my attention. As he suggests, the crucial question is “Will it stop the current owners retracting?”, following the 41% retraction of SBC.PR.A at the end of 2022 and the 75% retraction of OSP.PR.A itself in early 2020. Well, you got me! The issue has been trading slightly under par during January and the Whole Unit NAPVU is 14.62 as of 2023-1-26, much healthier than the 8.28 at the end of February 2020. On the other hand, DGS.PR.A is yielding 9.63% at its current bid price of 9.45, despite a Whole Unit NAVPU of 15.29 as of 2023-1-26. Added to which, OSP.PR.A is inherently less credit-worthy due to its concentration in the oil industry. So retraction, or a prior sale on the market at 10.00+, certainly looks attractive! The decision would be far more complex if Brompton had offered a longer term for that big fat 8.00%.

The capital units, by the way, are trading above intrinisic value at 4.85 VWAP, but volume is low and the price shot up on Friday and there hasn’t been a Capital Unit Distribution for quite a while. It won’t take much of a capital share consolidation following preferred retraction to get the distribution flowing again … could it be that Friday’s buyers are anticipating exactly that, to be followed by a pop in the capital units from those who look for dividend yield without qualifications or reservations?

This is very old (2022-9-6), but is being added for completeness: Manulife Financial Corporation has announced:

that after having taken into account all election notices received by the September 2, 2022 deadline for conversion of its currently outstanding 10,000,000 Non-cumulative Rate Reset Class 1 Shares Series 9 (the “Series 9 Preferred Shares”) (TSX: MFC.PR.I) into Non-cumulative Floating Rate Class 1 Shares Series 10 of Manulife (the “Series 10 Preferred Shares”), the holders of Series 9 Preferred Shares are not entitled to convert their Series 9 Preferred Shares into Series 10 Preferred Shares. There were 26,525 Series 9 Preferred Shares elected for conversion, which is less than the minimum one million shares required to give effect to conversions into Series 10 Preferred Shares.

As announced by Manulife on August 22, 2022, after September 19, 2022, holders of Series 9 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 September 20, 2022, and ending on September 19, 2027, will be 5.97800% per annum or $0.373625 per share per quarter, being equal to the sum of the five-year Government of Canada bond yield as of August 22, 2022, plus 2.86%, as determined in accordance with the terms of the Series 9 Preferred Shares.

Subject to certain conditions described in the prospectus supplement dated May 16, 2012 relating to the issuance of the Series 9 Preferred Shares, Manulife may redeem the Series 9 Preferred Shares, in whole or in part, on September 19, 2027 and on September 19 every five years thereafter.

MFC.PR.I was issued as a FixedReset, 4.40%+286, that commenced trading 2012-5-24 after being announced 2012-5-16. After the 2017 announcement the issue would be extended, the rate was reset to 4.35100% and I recommended against conversion; there was no conversion. Notice of extension earlier in 2022 has been previously reported and announcement of the reset rate at 5.978% soon followed. MFC.PR.I is tracked by HIMIPref™ and is included in the FixedReset (Discount) subindex.

Thanks to Assiduous Reader JD for reminding me of incomplete reporting!

Pembina Pipeline Corporation has announced:

that it does not intend to exercise its right to redeem the currently outstanding Cumulative Redeemable Minimum Rate Reset Class A Preferred Shares, Series 25 (“Series 25 Shares”) (TSX: PPL.PF.E) on February 15, 2023. The Company also announced that its Board of Directors has declared quarterly dividends for the Company’s preferred shares, Series 1, 3, 5, 7, 9, 15, 17, 19, 21 and 25.

Series 25 Preferred Share Conversion Right and Reset Dividend Rates
As a result of the decision not to redeem the Series 25 Shares, and subject to certain terms of the Series 25 Shares, the holders of the Series 25 Shares will have the right to elect to convert all or part of their Series 25 Shares on a one-for-one basis into Cumulative Redeemable Floating Rate Class A Preferred Shares, Series 26 of Pembina (“Series 26 Shares”) on February 15, 2023 (the “Conversion Date”). Holders who do not exercise their right to convert their Series 25 Shares into Series 26 Shares will retain their Series 25 Shares.

As provided in the terms of the Series 25 Shares: (i) if Pembina determines that there would remain outstanding immediately following the conversion less than 1,000,000 Series 25 Shares, then all remaining Series 25 Shares will be automatically converted into Series 26 Shares on a one-for-one basis effective as of the Conversion Date; or (ii) if Pembina determines that there would be less than 1,000,000 Series 26 Shares outstanding immediately following the conversion, no Series 25 Shares will be converted into Series 26 Shares on the Conversion Date. There are currently 10,000,000 Series 25 Shares outstanding.

With respect to any Series 25 Shares that remain outstanding after the Conversion Date, holders thereof will be entitled to receive quarterly fixed cumulative preferential cash dividends, if, as and when declared by the Board of Directors of Pembina. The annual dividend rate for the Series 25 Shares for the five-year period from and including February 15, 2023, to, but excluding, February 15, 2028, will be 6.481 percent, being equal to the five-year Government of Canada bond yield of 2.971 percent determined as of today plus 3.51 percent, in accordance with the terms of the Series 25 Shares.

With respect to any Series 26 Shares that may be issued on the Conversion Date, holders thereof will be entitled to receive quarterly floating rate cumulative preferential cash dividends, if, as and when declared by the Board of Directors of Pembina. The annual dividend rate applicable to the Series 26 Shares for the three-month floating rate period from and including February 15, 2023, to, but excluding, May 15, 2023, will be 7.866 percent, being equal to the annual rate of interest for the most recent auction of 90-day Government of Canada treasury bills of 4.356 percent plus 3.51 percent, in accordance with the terms of the Series 26 Shares (the “Floating Quarterly Dividend Rate”). The Floating Quarterly Dividend Rate will be reset on the 15th day of February, May, August and November in each year.

Beneficial holders of Series 25 Shares who wish to exercise their right of conversion during the conversion period, which runs from January 16, 2023, until 3:00 pm (MT) / 5:00 pm (ET) on January 31, 2023, should communicate as soon as possible with their broker or other intermediary for more information. It is recommended that this be done well in advance of the deadline in order to provide the broker or other intermediary with the time to complete the necessary steps. Any notices received after this deadline will not be valid.

As announced below, the dividend payable on February 15, 2023, to holders of the Series 25 Shares of record on January 31, 2023, will be $0.3250 per Series 25 Share, consistent with the dividend rate in effect since the issuance of the Series 25 Shares. For more information on the terms of the Series 25 Shares and the Series 26 Shares, please see Pembina’s articles of amendment dated December 16, 2019, relating to the creation of the Series 25 Shares and the Series 26 Shares, which can be found on SEDAR at www.sedar.com.

PPL.PF.E was issued as KML.PR.C, a FixedReset, 5.20%+351M520, that commenced trading 2017-12-15 after being announced 2017-12-6. A Plan of Arrangement was announced in August 2019 and a vote by preferred shareholders was made explicit in September 2019. The ticker changed in late 2019.

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

Canadian Imperial Bank of Commerce has announced:

the dividend rates applicable to its Non-cumulative Rate Reset Class A Preferred Shares Series 47 (Non-Viability Contingent Capital (NVCC)) (the “Series 47 Shares”) and Non-cumulative Floating Rate Class A Preferred Shares Series 48 (Non-Viability Contingent Capital (NVCC)) (the “Series 48 Shares”).

The fixed dividend rate applicable to the Series 47 Shares, should any remain outstanding after January 31, 2023, for the five-year period from and including January 31, 2023 to but excluding January 31, 2028 is 5.878%, payable quarterly as and when declared by the Board of Directors of CIBC.

The floating dividend rate applicable to the Series 48 Shares, should any be issued, for the three-month period from and including January 31, 2023 to but excluding April 30, 2023 is 6.753%, payable for the period as defined as and when declared by the Board of Directors of CIBC. CIBC has designated the Series 48 Shares as eligible to participate in the CIBC Shareholder Investment Plan.

Beneficial owners of Series 47 Shares who wish to exercise their conversion right should instruct their broker or other nominee to exercise such right during the conversion period, which runs from January 1, 2023 until 5:00 p.m. (Eastern Standard Time) on January 16, 2023. Any notices received after this deadline will not be valid.

CM.PR.S was issued as a FixedReset, 4.50%+245, NVCC-compliant, that commenced trading 2018-1-18 after being announced January 10. Notice of extension was provided 2022-12-15. The issue is tracked by HIMIPref™ and is assigned to the FixedReset (Discount) subindex.

I have received a mildly irate eMail from Assiduous Reader PG:

Has CIBC jumped the gun with today’s rate announcement for CM.PR.S?

As per the Prospectus, the “Fixed Rate Calculation Date” for any “Subsequent Fixed Rate Period” is the 30th day prior to the first day of such Subsequent Fixed Rate Period. The latter term, in this case, refers to the five-year period from and including January 31, 2023.

Thirty days prior to January 31 obviously falls on Sunday, January 1.

The CIBC Prospectus for CM.PR.S does NOT have the usual “Business Day” provision found in so many other Prospectuses and which would have any action to be taken fall on the next business day.

I realize CIBC went on record as choosing December 30, but do they have that discretion?

Well, it’s true. The CM.PR.S prospectus provides the usual definition of the “Fixed Rate Calculation Date”, but does not specify what is to happen if this date is not a business day; and this, presumably, played a role in CIBC’s decision to specify the actual date in their notice of extension.

I agree that it’s better to have these things specified in the prospectus, but I think CIBC acted responsibly in providing two week’s notice of the actual date. Careless errors with calculation dates became an issue in the 2019 reset of HSE.PR.C and in the 2019 reset of AZP.PR.B. All I can say is that if this sort of thing is important to investors, then they should check the prospectus in advance of any purchase.

Thanks to Assiduous Reader niagara for bringing this to my attention and to to CanSiamCyp for the follow -up.