Category: Issue Comments

Great-West Lifeco Inc. has announced:

the dividend rates for its Non-Cumulative 5-Year Rate Reset First Preferred Shares, Series N (the “Series N Shares”) and for its Non-Cumulative Floating Rate First Preferred Shares, Series O (the “Series O Shares”).

The annual fixed dividend rate for the five-year period commencing on December 31, 2020 and ending on December 30, 2025 applicable to any Series N Shares that remain outstanding on December 31, 2020 will be 1.749% per annum (or $0.109313 per Series N Share per quarter). The 1.749% annual rate is equal to the sum of the Government of Canada Yield (as defined in the Series N Share conditions) on December 1, 2020 plus 1.30%.

The floating dividend rate for the period commencing on December 31, 2020 and ending on March 30, 2021 applicable to any Series O Shares that remain outstanding on December 31, 2020 will be 1.409% per annum (or $0.086855 per Series O Share per quarter). The 1.409% annual rate is equal to the sum of the T-Bill Rate (as defined in the Series O Share conditions) on December 1, 2020 plus 1.30%.

A news release announcing conversion rights for the Series N Shares and the Series O Shares was issued on November 4, 2020 and can be viewed on Great-West Lifeco’s website. Beneficial owners of Series N Shares and Series O Shares who wish to convert their shares should communicate as soon as possible with their broker or other nominee to ensure their instructions are followed so that the registered holder of the Series N Shares or Series O Shares (as applicable) can meet the deadline to exercise such conversion right(s), which is 5:00 p.m. (ET) on Wednesday, December 16, 2020.

GWO.PR.N was issued as a FixedReset, 3.65%+130, that commenced trading 2010-11-23 after being announced 2010-11-15. The issue was met with disfavour and there was an inventory clearance sale closing 2010-12-3. After a notice of extension the issue issue reset to 2.176% in 2015. I recommended against conversion; there was a 15% conversion to the FloatingReset GWO.PR.O anyway. The company provided another notice of extension in November, 2020.

GWO.PR.O is a FloatingReset, Bills+130, that arose in 2015 via a partial conversion from GWO.PR.N.

Power Financial Corporation has announced:

that it does not intend to exercise its right to redeem all or part of the currently outstanding 8,965,485 Non-Cumulative 5-Year Rate Reset First Preferred Shares, Series P (the “Series P shares”) nor all or part of the currently outstanding 2,234,515 Non-Cumulative Floating Rate First Preferred Shares, Series Q (the “Series Q shares”) on January 31, 2021. As a result, subject to certain conditions, the holders of the Series P shares have the right to convert all or part of their Series P shares, on a one-for-one basis, into Series Q shares, and subject to certain conditions, the holders of the Series Q shares have the right to convert all or part of their Series Q shares, on a one-for-one basis, into Series P shares, in each case on February 1, 2021 (the “Conversion Date”), pursuant to the terms and conditions of the Series P shares and the Series Q shares.

Holders of Series P shares who do not exercise their right to convert their Series P shares into Series Q shares on the Conversion Date will retain their Series P shares, and holders of the Series Q shares who do not exercise their right to convert their Series Q shares into Series P shares on the Conversion Date will retain their Series Q shares, in each case, subject to certain conditions.

The foregoing conversion rights of the Series P shares and the Series Q shares are subject to the conditions that: (i) if Power Financial determines that there would remain outstanding on the Conversion Date less than 1,000,000 Series Q shares, after having taken into account all Series P shares and Series Q shares tendered for conversion, then holders of Series P shares will not be entitled to convert their shares into Series Q shares and all remaining Series Q shares will automatically be converted into Series P shares without the consent of the holders, on a one-for-one basis, on the Conversion Date, and (ii) alternatively, if Power Financial determines that there would remain outstanding on the Conversion Date less than 1,000,000 Series P shares, after having taken into account all Series P shares and Series Q shares tendered for conversion, then holders of Series Q shares will not be entitled to convert their shares into Series P shares and all remaining Series P shares will automatically be converted into Series Q shares without the consent of the holders, on a one-for-one basis, on the Conversion Date. In either case, Power Financial will give written notice to that effect to the registered holders of Series P shares and/or Series Q shares, as the case may be, no later than January 25, 2021.

The dividend rate applicable to the Series P shares for the 5-year period from January 31, 2021 to but excluding January 31, 2026, and the dividend rate applicable to the Series Q shares for the 3-month period from January 31, 2021 to but excluding April 30, 2021, will be determined and announced by way of a news release on January 4, 2021.

Beneficial owners of Series P shares or Series Q 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 runs from January 4, 2021 until January 18, 2021 at 5:00 p.m. (Eastern Time).

PWF.PR.P was issued as a FixedReset, 4.40%+160, that commenced trading 2010-6-29 after being announced 2010-6-17. It reset to 2.306% in 2016; I recommended against conversion but there was a 20% conversion to PWF.PR.Q anyway.

PWF.PR.Q is a FloatingReset, Bills+160, that arose via a partial conversion from PWF.PR.P in 2016.

Fairfax Financial Holdings Limited has announced:

that it has determined the fixed dividend rate on its Cumulative 5-Year Rate Reset Preferred Shares, Series I (the “Series I Shares”) (TSX: FFH.PR.I) for the five years commencing January 1, 2021 and ending December 31, 2025. The fixed quarterly dividends on the Series I Shares during that period, if and when declared, will be paid at an annual rate of 3.327% (C$0.207938 per share per quarter).

Holders of Series I Shares have the right, at their option, exercisable not later than 5:00 p.m. (Toronto time) on December 16, 2020, to convert all or part of their Series I Shares, on a one-for-one basis, into Cumulative Floating Rate Preferred Shares, Series J (the “Series J Shares”) (TSX: FFH.PR.J), effective December 31, 2020. The quarterly floating rate dividends on the Series J Shares will be paid at an annual rate, calculated for each quarter, of 2.85% over the annual yield on three-month Government of Canada treasury bills. The actual quarterly dividend rate in respect of the December 31, 2020 to March 30, 2021 dividend period for the Series J Shares will be 0.72962% (2.95901% on an annualized basis) and the dividend for such dividend period, if and when declared, will be C$0.18240 per share, payable on March 30, 2021.

Holders of Series J Shares also have the right, at their option, exercisable not later than 5:00 p.m. (Toronto time) on December 16, 2020, to convert all or part of their Series J Shares, on a one-for-one basis, into Series I Shares, effective December 31, 2020. Holders of the Series J Shares who elect to convert their shares by the conversion deadline will receive Series I Shares effective December 31, 2020 and will be entitled to receive, if and when declared, the fixed-rate dividend as described above.

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

As provided in the share conditions of the Series I Shares and the Series J Shares: (i) if Fairfax determines that there would be fewer than 1,000,000 Series I Shares outstanding after December 31, 2020, all remaining Series I Shares will be automatically converted into Series J Shares on a one-for-one basis effective December 31, 2020 and Fairfax will cause the return of all Series J Shares tendered for conversion into Series I Shares; and (ii) if Fairfax determines that there would be fewer than 1,000,000 Series J Shares outstanding after December 31, 2020, all remaining Series J Shares will be automatically converted into Series I Shares on a one-for-one basis effective December 31, 2020 and Fairfax will cause the return of all Series I Shares tendered for conversion into Series J Shares.

There are currently 10,465,553 Series I Shares and 1,534,447 Series J Shares outstanding. The Series I Shares and the Series J Shares are listed on the Toronto Stock Exchange under the trading symbols “FFH.PR.I” and “FFH.PR.J”, respectively.

FFH.PR.I was issued as a FixedReset, 5.00%+285, that commenced trading 2010-10-5 after being announced 2010-9-27. I recommended against conversion.

FFH.PR.J is a FloatingReset, Bills+285, that came into existence in 2015 via partial conversion from FFH.PR.I.

Brookfield Asset Management Inc. has announced:

that it has determined the fixed dividend rate on its Cumulative Class A Preference Shares, Series 44 (“Series 44 Shares”) (TSX: BAM.PF.H) for the five years commencing January 1, 2021 and ending December 31, 2025, and also determined the quarterly dividend on its floating rate Cumulative Class A Preference Shares, Series 25 (“Series 25 Shares”) (TSX: BAM.PR.S).

Series 44 Shares and Series 45 Shares

If declared, the fixed quarterly dividends on the Series 44 Shares during the five years commencing January 1, 2021 will be paid at an annual rate of 5.00% ($0.3125 per share per quarter).

Holders of Series 44 Shares have the right, at their option, exercisable not later than 5:00 p.m. (Toronto time) on December 16, 2020, to convert all or part of their Series 44 Shares, on a one-for-one basis, into Cumulative Class A Preference Shares, Series 45 (the “Series 45 Shares”), effective December 31, 2020.

The quarterly floating rate dividends on the Series 45 Shares will be paid at an annual rate, calculated for each quarter, of 4.17% over the annual yield on three-month Government of Canada treasury bills. The actual quarterly dividend rate in respect of the January 1, 2021 to March 31, 2021 dividend period for the Series 45 Shares will be 1.0551% (4.279% on an annualized basis) and the dividend, if declared, for such dividend period will be $0.263775 per share, payable on March 31, 2021.

Holders of Series 44 Shares are not required to elect to convert all or any part of their Series 44 Shares into Series 45 Shares.

As provided in the share conditions of the Series 44 Shares, (i) if Brookfield determines that there would be fewer than 1,000,000 Series 44 Shares outstanding after December 31, 2020, all remaining Series 44 Shares will be automatically converted into Series 45 Shares on a one-for-one basis effective December 31, 2020; and (ii) if Brookfield determines that there would be fewer than 1,000,000 Series 45 Shares outstanding after December 31, 2020, no Series 44 Shares will be permitted to be converted into Series 45 Shares. There are currently 9,831,929 Series 44 Shares outstanding.

The Toronto Stock Exchange (“TSX”) has conditionally approved the listing of the Series 45 Shares effective upon conversion. Listing of the Series 45 Shares is subject to Brookfield fulfilling all the listing requirements of the TSX and, upon approval, the Series 45 Shares will be listed on the TSX under the trading symbol “BAM.PF.K”.

Series 25 Shares

The dividend on the Series 25 Shares is 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 January 1, 2021 to March 31, 2021 dividend period will be 0.594% (2.409% on an annualized basis) and the dividend, if declared, for such dividend period will be $0.1485 per share, payable on March 31, 2021.

BAM.PF.H was issued as a FixedReset, 5.00%+417M500, that commenced trading 2015-10-2 after being announced 2015-9-24. It is tracked by HIMIPref™ and has been assigned to the FixedResets subindex.

Capital Power Corporation has announced:

that it has notified registered shareholders of its Cumulative Rate Reset Preference Shares, Series 1 (Series 1 Shares) (TSX: CPX.PR.A) of the Conversion Privilege and Dividend Rate Notice.

Subject to certain conditions, beginning on December 1, 2020 and ending at 5:00 p.m. (Toronto time) on December 16, 2020 each registered holder of Series 1 Shares will have the right to elect to convert any or all of their Series 1 Shares into an equal number of Cumulative Floating Rate Preference Shares, Series 2 (Series 2 Shares) by delivering an Election Notice to the Corporation.

If Capital Power does not receive an Election Notice from a holder of Series 1 Shares during the time fixed therefor, then the Series 1 Shares shall be deemed not to have been converted (except in the case of an Automatic Conversion, see below). Holders of the Series 1 Shares and the Series 2 Shares will have the opportunity to convert their shares again on December 31, 2025, and every five years thereafter as long as the shares remain outstanding.

Effective December 31, 2020, on December 1, 2020, the Annual Fixed Dividend Rate for the Series 1 Shares was set for the next five-year period at 2.62100%. Effective December 31, 2020, on December 1, 2020, the Floating Quarterly Dividend for the Series 2 Shares was set for the first Quarterly Floating Rate Period (being the period from and including December 31, 2020, to but excluding March 31, 2021) at 0.56195%. The Floating Quarterly Dividend Rate will be reset every quarter.

The Series 1 Shares are issued in “book entry only” form and, as such, the sole registered holder of the Series 1 Shares is CDS Clearing and Depository Services Inc. (CDS). All rights of beneficial holders of Series 1 Shares must be exercised through CDS or the CDS participant through which the Series 1 Shares are held. The deadline for the registered shareholder to provide notice of exercise of the right to convert Series 1 Shares into Series 2 Shares is 3:00 p.m. (MST) / 5:00 p.m. (EST) on December 16, 2020. Any Election Notices received after this deadline will not be valid. As such, beneficial holders of Series 1 Shares who wish to exercise their rights to convert their shares should contact their broker or other intermediary for more information and it is recommended that this be done well in advance of the deadline in order to provide the broker or other intermediary with time to complete the necessary steps.

After December 16, 2020, (i) if Capital Power determines that there would remain outstanding on December 31, 2020, less than 1,000,000 Series 1 Shares, all remaining Series 1 Shares will be automatically converted into Series 2 Shares on a one-for one basis effective December 31, 2020 (an Automatic Conversion); or (ii) if Capital Power determines that there would remain outstanding after December 31, 2020, less than 1,000,000 Series 2 Shares, no Series 1 Shares will be permitted to be converted into Series 2 Shares effective December 31, 2020. There are currently 5,000,000 Series 1 Shares outstanding.

The Toronto Stock Exchange (TSX) has conditionally approved the listing of the Series 2 Shares effective upon conversion. Listing of the Series 2 Shares is subject to the Capital Power fulfilling all the listing requirements of the TSX and upon approval, the Series 2 Shares will be listed on the TSX under the trading symbol CPX.PR.B.

For more information on the terms of, and risks associated with an investment in, the Series 1 Shares and the Series 2 Shares, please see Capital Power’s (final) short form prospectus dated December 8, 2010 which is available on sedar.com or on Capital Power’s website at capitalpower.com.

CPX.PR.A was issued as a FixedReset 4.60%+217 that commenced trading 2010-12-16 after being announced 2010-12-1. It reset to 3.06% effective 2015-12-31 and I recommended against conversion; there was no conversion to FloatingResets.

Pembina Pipeline Corporation has announced (on November 16):

that none of Pembina’s Cumulative Redeemable Rate Reset Class A Preferred Shares, Series 9 (“Series 9 Shares”) (TSX: PPL.PR.I) will be converted into Cumulative Redeemable Floating Rate Class A Preferred Shares, Series 10 of Pembina (“Series 10 Shares”) on December 1, 2020.

After taking into account all the conversion notices received from holders of its outstanding Series 9 Shares by the November 16, 2020 deadline for the conversion of the Series 9 Shares into Series 10 Shares, less than the 1,000,000 Series 9 Shares required to give effect to conversions into Series 10 Shares were tendered for conversion.

PPL.PR.I was issued as a FixedReset, 4.75%+391, that commenced trading 2015-4-10 after being announced 2015-3-31. It will reset to 4.302% effective 2020-12-1. It is tracked by HIMIPref™ but relegated to the Scraps index on credit concerns.

BCE Inc. has announced (on November 18):

that none of its fixed rate Cumulative Redeemable First Preferred Shares, Series R (Series R Preferred Shares) will be converted into floating rate Cumulative Redeemable First Preferred Shares, Series Q (Series Q Preferred Shares) on December 1, 2020.

On October 15, 2020, BCE notified registered holders of Series R Preferred Shares that they could elect to convert their shares into Series Q Preferred Shares subject to the terms and conditions attached to those shares. Only 156,972 of BCE’s 8,000,000 Series R Preferred Shares were tendered for conversion on December 1, 2020 into Series Q Preferred Shares. As this would result in there being less than one million Series Q Preferred Shares outstanding, no Series R Preferred Shares will, as per the terms and conditions attached to those shares, be converted on December 1, 2020 into Series Q Preferred Shares. Registered holders who had elected to convert their Series R Preferred Shares will be receiving, by December 1, 2020, share certificates representing the number of Series R Preferred Shares tendered for conversion.

The Series R Preferred Shares will continue to be listed on the Toronto Stock Exchange under the symbol BCE.PR.R. The Series R Preferred Shares will pay on a quarterly basis, for the five-year period beginning on December 1, 2020, as and when declared by the Board of Directors of BCE, a fixed cash dividend based on an annual dividend rate of 3.018%.

BCE.PR.R is a FixedFloater that reset to 4.490% in 2010 with no conversion to RatchetRate. It reset to 4.13% in 2015, and will reset to 3.018% effective 2020-12-1.

TC Energy Corporation has announced (on November 23):

that 139,529 of its 10,000,000 fixed rate Cumulative Redeemable First Preferred Shares, Series 11 (Series 11 Shares) were deposited for conversion on November 30, 2020 on a one-for-one basis into floating rate Cumulative Redeemable First Preferred Shares, Series 12 (Series 12 Shares).

As previously announced in our news release dated November 2, 2020, the conversions are subject to the conditions that: (i) if TC Energy determines that there would be less than one million Series 11 Shares outstanding after November 30, 2020, then all remaining Series 11 Shares will automatically be converted into Series 12 Shares on a one-for-one basis on November 30, 2020 and (ii) alternatively, if TC Energy determines that there would be less than one million Series 12 Shares outstanding after November 30, 2020, no Series 11 Shares will be converted into Series 12 Shares.

As the total number of Series 11 Shares tendered for conversion did not meet the threshold set above, no Series 11 Shares will be converted into Series 12 Shares on November 30, 2020.

For more information on the terms of, and risks associated with an investment in the Series 11 Shares and the Series 12 Shares, please see the Corporation’s prospectus supplement dated February 23, 2015 which is available on sedar.com or on our website.

TRP.PR.G was issued as a FixedReset, 3.80%+296, that commenced trading 2015-3-2 after being announced 2015-2-23. It reset to 3.351% effective 2020-11-30. It is tracked by HIMIPref™ and is assigned to the FixedReset-Discount subindex.

Bank of Montreal announced (on October 15):

its intention to redeem all of its 6,000,000 outstanding Non-Cumulative Perpetual Class B Preferred Shares, Series 35 (Non-Viability Contingent Capital) (the “Preferred Shares Series 35”) for an aggregate total of $156 million on November 25, 2020. The redemption has been approved by the Office of the Superintendent of Financial Institutions.

The Preferred Shares Series 35 are redeemable at the Bank’s option on or after August 25, 2020 and prior to August 25, 2021, at a redemption price of $26.00 per share. Payment of the redemption price will be made by the Bank on November 25, 2020.

Separately from the payment of the redemption price, the final quarterly dividend of $0.3125 per share for the Preferred Shares Series 35 announced by the Bank on August 25, 2020 will be paid in the usual manner on November 25, 2020, to shareholders of record on November 2, 2020.

Notice will be delivered to holders of the Preferred Shares Series 35 in accordance with the terms outlined in the Preferred Shares Series 35 prospectus supplement.

BMO.PR.Z is a Straight Perpetual, 5.00%, NVCC-compliant issue, that commenced trading 2015-7-29 after being announced 2015-7-20. It has been tracked by HIMIPref™ and was assigned to the PerpetualPremium sub-index.