Category: Issue Comments

Fairfax Financial Holdings Limited has announced:

that it has determined the fixed dividend rate on its Cumulative 5-Year Rate Reset Preferred Shares, Series K (“Series K Shares”) (TSX: FFH.PR.K) for the five years commencing April 1, 2022 and ending March 31, 2027. The fixed quarterly dividends on the Series K Shares during that period, if and when declared, will be paid at an annual rate of 5.045% (C$0.315313 per share per quarter).

Holders of Series K Shares have the right, at their option, exercisable not later than 5:00 pm (Toronto time) on March 16, 2022, to convert all or part of their Series K Shares, on a one-for-one basis, into Cumulative Floating Rate Preferred Shares, Series L (“Series L Shares”), effective March 31, 2022. The quarterly floating rate dividends on the Series L Shares will be paid at an annual rate, calculated for each quarter, of 3.51% over the annual yield on three-month Government of Canada treasury bills. The actual quarterly dividend rate in respect of the April 1, 2022 to June 29, 2022 dividend period for the Series L Shares will be 1.01712% (4.12500% on an annualized basis) and the dividend for such dividend period, if and when declared, will be C$0.25428 per share, payable on June 29, 2022.

Holders of Series K Shares are not required to elect to convert all or any part of their Series K Shares into Series L Shares. Holders of the Series K Shares who do not elect to convert their shares by the conversion deadline will retain their Series K Shares and will receive the fixed-rate dividend as described above (subject to the automatic conversion features described below).

As provided in the share conditions of the Series K Shares, (i) if Fairfax determines that there would be fewer than 1,000,000 Series K Shares outstanding after March 31, 2022, all remaining Series K Shares will be automatically converted into Series L Shares on a one-for-one basis effective March 31, 2022; and (ii) if Fairfax determines that there would be fewer than 1,000,000 Series L Shares outstanding after March 31, 2022, no Series K Shares will be permitted to be converted into Series L Shares. There are currently 9,500,000 Series K Shares outstanding.

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

FFH.PR.K was issued as a FixedReset, 5.00%+351, that commenced trading 2012-3-21 after being announced 2012-3-12. In 2017 the issue reset to 4.671%; I recommended against conversion; and there was no conversion.

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 EE (“Series EE Shares”) (TSX: BPO.PR.E).
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Series EE Shares

If declared, the fixed quarterly dividends on the Series EE Shares for the five years commencing April 1, 2022 and ending March 31, 2027 will be paid at an annual rate of 5.496% ($0.3435 per share per quarter).

Holders of Series EE Shares have the right, at their option, exercisable not later than 5:00 p.m. (Toronto time) on March 15, 2022, to convert all or part of their Series EE Shares, on a one-for-one basis, into Class AAA Preference Shares, Series FF (the “Series FF Shares”), effective March 31, 2022.

The quarterly floating rate dividends on the Series FF Shares have an annual rate, calculated for each quarter, of 3.96% over the annual yield on three-month Government of Canada treasury bills. The actual quarterly dividend rate for the April 1, 2022 to June 30, 2022 dividend period for the Series FF Shares will be 1.14186% (4.58% on an annualized basis) and the dividend, if declared, for such dividend period will be $0.285465 per share, payable on June 30, 2022.

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

As provided in the share conditions of the Series EE Shares, (i) if Brookfield determines that there would be fewer than 1,000,000 Series EE Shares outstanding after March 31, 2022, all remaining Series EE Shares will be automatically converted into Series FF Shares on a one-for-one basis effective March 31, 2022; and (ii) if Brookfield determines that there would be fewer than 1,000,000 Series FF Shares outstanding after March 31, 2022, no Series EE Shares will be permitted to be converted into Series FF Shares. There are currently 11,000,000 Series EE Shares outstanding.

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

BPO.PR.E was issued as a FixedReset, 5.10%+396M510, that commenced trading 2017-2-17 after being announced 2017-2-9. It is tracked by HIMIPref™ but relegated to the Scraps index on credit concerns.

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 P (“Series P Shares”) (TSX: BPO.PR.P
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Series P Shares

If declared, the fixed quarterly dividends on the Series P Shares for the five years commencing April 1, 2022 and ending March 31, 2027 will be paid at an annual rate of 4.536% ($0.2835 per share per quarter).

Holders of Series P Shares have the right, at their option, exercisable not later than 5:00 p.m. (Toronto time) on March 15, 2022, to convert all or part of their Series P Shares, on a one-for-one basis, into Class AAA Preference Shares, Series Q (the “Series Q Shares”), effective March 31, 2022.

The quarterly floating rate dividends on the Series Q Shares have an annual rate, calculated for each quarter, of 3.0% over the annual yield on three-month Government of Canada treasury bills. The actual quarterly dividend rate for the April 1, 2022 to June 30, 2022 dividend period for the Series Q Shares will be 0.90252% (3.62% on an annualized basis) and the dividend, if declared, for such dividend period will be $0.22563 per share, payable on June 30, 2022.

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

As provided in the share conditions of the Series P Shares, (i) if Brookfield determines that there would be fewer than 1,000,000 Series P Shares outstanding after March 31, 2022, all remaining Series P Shares will be automatically converted into Series Q Shares on a one-for-one basis effective March 31, 2022; and (ii) if Brookfield determines that there would be fewer than 1,000,000 Series Q Shares outstanding after March 31, 2022, no Series P Shares will be permitted to be converted into Series Q Shares. There are currently 12,000,000 Series P Shares outstanding.

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

BPO.PR.P was issued as a FixedReset, 5.15%+300, that commenced trading 2010-10-21 after being announced 2010-10-13. The issue reset to 4.161% in 2016; I recommended against conversion; and there was no conversion.

Brookfield Asset Management Inc has announced it has:

determined the fixed dividend on its Cumulative Class A Preference Shares, Series 46 (“Series 46 Shares”) (TSX: BAM.PF.I) for the five years commencing April 1, 2022 and ending March 31, 2027.
…
Series 46 Shares and Series 47 Shares

If declared, the fixed quarterly dividends on the Series 46 Shares during the five years commencing April 1, 2022 will be paid at an annual rate of 5.386% ($0.336625 per share per quarter).

Holders of Series 46 Shares have the right, at their option, exercisable not later than 5:00 p.m. (Toronto time) on March 16, 2022, to convert all or part of their Series 46 Shares, on a one-for-one basis, into Cumulative Class A Preference Shares, Series 47 (the “Series 47 Shares”), effective March 31, 2022. The quarterly floating rate dividends on the Series 47 Shares will be paid at an annual rate, calculated for each quarter, of 3.85% over the annual yield on three-month Government of Canada treasury bills. The actual quarterly dividend rate in respect of the April 1, 2022 to June 30, 2022 dividend period for the Series 47 Shares will be 1.11319% (4.465% on an annualized basis) and the dividend, if declared, for such dividend period will be $0.2782975 per share, payable on June 30, 2022.

Holders of Series 46 Shares are not required to elect to convert all or any part of their Series 46 Shares into Series 47 Shares.

As provided in the share conditions of the Series 46 Shares, (i) if Brookfield determines that there would be fewer than 1,000,000 Series 46 Shares outstanding after March 31, 2022, all remaining Series 46 Shares will be automatically converted into Series 47 Shares on a one-for-one basis effective March 31, 2022; and (ii) if Brookfield determines that there would be fewer than 1,000,000 Series 47 Shares outstanding after March 31, 2022, no Series 46 Shares will be permitted to be converted into Series 47 Shares. There are currently 11,740,797 Series 46 Shares outstanding.

The Toronto Stock Exchange (“TSX”) has conditionally approved the listing of the Series 47 Shares effective upon conversion. Listing of the Series 47 Shares is subject to Brookfield fulfilling all the listing requirements of the TSX.

BAM.PF.I was issued as a FixedReset, 4.80%+385M480 that commenced trading 2016-11-18 after being announced 2016-11-10. It is tracked by HIMIPref™ and is been assigned to the FixedReset (premium) subindex.

Brookfield Asset Management Inc has announced:

that it has determined the fixed dividend rate on its Cumulative Class A Preference Shares, Series 26 (“Series 26 Shares”) (TSX: BAM.PR.T) for the five years commencing April 1, 2022 and ending March 31, 2027,
…
Series 26 Shares and Series 27 Shares

If declared, the fixed quarterly dividends on the Series 26 Shares during the five years commencing April 1, 2022 will be paid at an annual rate of 3.846% ($0.240375 per share per quarter).

Holders of Series 26 Shares have the right, at their option, exercisable not later than 5:00 p.m. (Toronto time) on March 16, 2022, to convert all or part of their Series 26 Shares, on a one-for-one basis, into Cumulative Class A Preference Shares, Series 27 (the “Series 27 Shares”), effective March 31, 2022. The quarterly floating rate dividends on the Series 27 Shares will be paid at an annual rate, calculated for each quarter, of 2.31% over the annual yield on three-month Government of Canada treasury bills. The actual quarterly dividend rate in respect of the April 1, 2022 to June 30, 2022 dividend period for the Series 27 Shares will be 0.72925% (2.925% on an annualized basis) and the dividend, if declared, for such dividend period will be $0.1823125 per share, payable on June 30, 2022.

Holders of Series 26 Shares are not required to elect to convert all or any part of their Series 26 Shares into Series 27 Shares.

As provided in the share conditions of the Series 26 Shares, (i) if Brookfield determines that there would be fewer than 1,000,000 Series 26 Shares outstanding after March 31, 2022, all remaining Series 26 Shares will be automatically converted into Series 27 Shares on a one-for-one basis effective March 31, 2022; and (ii) if Brookfield determines that there would be fewer than 1,000,000 Series 27 Shares outstanding after March 31, 2022, no Series 26 Shares will be permitted to be converted into Series 27 Shares. There are currently 9,770,928 Series 26 Shares outstanding.

The Toronto Stock Exchange (“TSX”) has conditionally approved the listing of the Series 27 Shares effective upon conversion. Listing of the Series 27 Shares is subject to Brookfield fulfilling all the listing requirements of the TSX.

BAM.PR.T was issued as a FixedReset, 4.50%+231, that commenced trading 2010-10-29 after being announced 2010-10-21. In 2017 it reset to 3.471%; I recommended against conversion; and there was no conversion.

TC Energy has announced:

that TransCanada Trust (the Trust), a wholly-owned financing trust subsidiary of TransCanada PipeLines Limited (TCPL), is considering an offering of subordinated trust notes (Trust Notes), guaranteed on a subordinated basis by TCPL, under the Trust’s short form base shelf prospectus dated Feb. 26, 2021.

If a successful offering is completed, the Company intends to use the proceeds to redeem its issued and outstanding Cumulative Redeemable Minimum Rate Reset First Preferred Shares, Series 15 (TSX:TRP.PR.K) pursuant to their terms, and pending such redemption, to reduce short-term indebtedness as well as for general corporate purposes. There is no certainty that the Trust will ultimately complete the offering being considered or as to the timing or terms on which such an offering might be completed.

TRP.PR.K is a FixedReset, 4.90%+385M490, that commenced trading 2016-11-21 after being announced 2016-11-14. It has been tracked by HIMIPref™ and assigned to the FixedReset (Premium) subindex.

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

Update, 2022-3-11: The Trust Note offering was successful.

TC Energy Corporation (TSX, NYSE: TRP) (TC Energy or the Company) today announced that TransCanada Trust (the Trust), a wholly-owned financing trust subsidiary of TransCanada PipeLines Limited (TCPL), has closed an offering of U.S. $800 million of 5.600% subordinated Trust Notes, Series 2022-A due March 7, 2082 (Trust Notes), guaranteed on a subordinated basis by TCPL. The Trust Notes were offered through a syndicate of underwriters, co-led by Deutsche Bank Securities Inc. and MUFG Securities Americas Inc., under the Trust’s short form base shelf prospectus dated Feb. 26, 2021, as supplemented by a prospectus supplement dated March 2, 2022.

The Company intends to use the proceeds to redeem its issued and outstanding Cumulative Redeemable Minimum Rate Reset First Preferred Shares, Series 15 (TSX:TRP.PR.K) pursuant to their terms, and pending such redemption, to reduce short-term indebtedness as well as for general corporate purposes.

BCE Inc. has announced (on February 24):

that it intends to redeem all of its outstanding Cumulative Redeemable First Preferred Shares, Series AO (the “Series AO Preferred Shares”) on March 31, 2022 at a redemption price of $25.00 per Series AO Preferred Share, less any taxes required to be deducted and withheld by the Corporation.

On February 2, 2022, the board of directors of the Corporation declared a quarterly dividend of $0.26625 per Series AO Preferred Share. This will be the final dividend on the Series AO Preferred Shares and will be paid in the usual manner on March 31, 2022 to shareholders of record as of February 28, 2022. After March 31, 2022, the Series AO Preferred Shares will cease to be entitled to dividends and the only remaining rights of holders of such shares will be to receive payment of the redemption amount.

A notice of the redemption of the Series AO Preferred Shares will be provided in accordance with the rights, privileges and conditions attached to the Series AO Preferred Shares. Beneficial holders of Series AO Preferred Shares should contact the financial institution, broker or other intermediary through which they hold these shares to confirm how they will receive their redemption proceeds.

BCE.PR.O was issued as BAF.PR.C, a FixedReset, 4.55%+309, that commenced trading 2011-12-7 after being announced 2011-11-21. BCE privatized Bell Aliant in 2014 and included an Exchange Offer for its preferreds. The offer was successful and later became mandatory. After the first round, the ticker symbol, etc., was changed. BCE.PR.O reset to 4.26% in 2017; I recommended against conversion; and there was no conversion.

Thanks to Peculiar_Investor and CanSiamCyp for bringing this to my attention!

AltaGas Ltd. has announced (on February 16):

its intention to redeem – in accordance with the terms of the Cumulative Redeemable 5-Year Minimum Rate Reset Preferred Shares, Series K (the “Series K Shares”) as set out in the Company’s articles – all of its 12,000,000 issued and outstanding Series K Shares on March 31, 2022 (the “Redemption Date”) for a redemption price equal to $25.00 per Series K Share, together with all accrued and unpaid dividends to, but excluding, the Redemption Date (the “Redemption Price”), less any tax required to be deducted or withheld by the Company.

As outlined in a January 11, 2022 press release, AltaGas will use the proceeds from the $300 million Financing of 5.25% Fixed-to-Fixed Rate Subordinated Notes, Series 1 due January 11, 2082 (the “Series 1 Notes”) to redeem the Series K Shares. AltaGas expects to save approximately $66 million in the initial ten-year term of the Series 1 Notes due to lower taxes and financing charges. The Financing and Redemption will also continue to stagger, extend and de-risk AltaGas’ capital structure.

The Company has provided notice today of the Redemption Price and the Redemption Date to the sole registered holder of the Series K Shares in accordance with the terms of the Series K Shares as set out in the Company’s articles. Non-registered holders of Series K Shares should contact their broker or other intermediary for information regarding the redemption process for the Series K Shares in which they hold a beneficial interest. The Company’s transfer agent for the Series K Shares is Computershare Investor Services Inc. Questions regarding the redemption process may be directed to Computershare Investor Services Inc. at 1-800-564-6253 or by email to corporateactions@computershare.com.

This confirms the earlier, non-binding company statement. Thanks to Assiduous Reader CanSiamCyp for bringing this to my attention.

Manulife Financial Corporation has announced (but not on their website, because who cares?):

its intention to redeem all of its outstanding 19,000,000 Non-cumulative Rate Reset Class 1 Shares Series 23 (“Series 23 Preferred Shares”) for cash on March 19, 2022. The Series 23 Preferred Shares (TSX: MFC.PR.R) are redeemable at Manulife’s option on March 19, 2022, at a redemption price per Series 23 Preferred Share equal to C$25.00 for an aggregate total of C$475 million. Formal notice will be delivered to holders of Series 23 Preferred Shares in accordance with the terms outlined in the share provisions for the Series 23 Preferred Shares.

Separately from the redemption price, the final quarterly dividend of C$0.303125 per Series 23 Preferred Share will be paid in the usual manner on March 19, 2022 to shareholders of record on February 23, 2022 or such other record date determined by the board. After the Series 23 Preferred Shares are redeemed, holders of Series 23 Preferred Shares will cease to be entitled to distributions of dividends and will not be entitled to exercise any rights as holders other than to receive the redemption price.

MFC.PR.R is a FixedReset, 4.85%+383, that commenced trading 2016-11-22 after being announced 2016-11-14. The issue has been tracked by HIMIPref™ and is included in the FixedReset (Premium) subindex.

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

Manulife Financial Corporation has announced (but not on their website because, well, you know, Manulife):

its intention to redeem all of its outstanding 10,000,000 Non-cumulative Rate Reset Class 1 Shares Series 7 (“Series 7 Preferred Shares”) for cash on March 19, 2022. The Series 7 Preferred Shares (TSX: MFC.PR.H) are redeemable at Manulife’s option on March 19, 2022, at a redemption price per Series 7 Preferred Share equal to C$25.00 for an aggregate total of C$250 million. Formal notice will be delivered to holders of Series 7 Preferred Shares in accordance with the terms outlined in the share provisions for the Series 7 Preferred Shares.

Separately from the redemption price, the final quarterly dividend of C$0.2695 per Series 7 Preferred Share will be paid in the usual manner on March 19, 2022 to shareholders of record on February 23, 2022 or such other record date determined by the board. After the Series 7 Preferred Shares are redeemed, holders of Series 7 Preferred Shares will cease to be entitled to distributions of dividends and will not be entitled to exercise any rights as holders other than to receive the redemption price.

MFC.PR.H is a FixedReset, 4.60%+313 that commenced trading 2012-2-22 after being announced 2012-2-14. Extension was announced in 2017, and the issue reset to 4.312%. I recommended against conversion and there was none.

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