Category: Issue Comments

BCE Inc. published their conversion notice for BCE.PR.F on 2024-12-16:

As of February 1, 2025, the Series AF Preferred Shares will, should they remain outstanding, 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 semiannually (the “Government of Canada Yield”), computed on January 13, 2025 by two registered Canadian 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 170%. The annual dividend rate applicable to the Series AF Preferred Shares will be published on January 16, 2025 in the national edition of The Globe and Mail, the Montreal Gazette and Le Devoir and will be posted on the BCE Inc. website at www.bce.ca.

There is a similar conversion notice for BCE.PR.E.

The Five-Year Canada rate is now 3.15%, if that is the case on the determination date of 2025-1-13, the dividend rate of BCE.PR.F will be 5.355%, or $1.33875 p.a.

BCE.PR.F is a FixedFloater which was added to the HIMIPref™ database in December 2008, when it was paying 4.40%. It reset in 2010 to 4.541% and after a net conversion to BCE.PR.F the issue pair was about 90% FixedFloater. It reset in 2015 to 3.110% and after a massive conversion the issue pair was about 60% RatchetRate. In 2020 the issue reset to 3.865% (which was 239% of the GOC-5 rate) and there was a net 17% conversion to FixedFloaters, which thus comprised about 59% of the combined issue size.

BCE.PR.E is a RatchetRate preferred, interconvertible every five years with BCE.PR.F. It was added to the HIMIPref™ database in May, 2012.

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

National Bank of Canada has announced:

its intention to redeem all of its 12,000,000 issued and outstanding Non-Cumulative 5-Year Rate Reset First Preferred Shares Series 32 (the “Series 32 Shares”) on February 15, 2025, for cash at a redemption price of $25.00 per share, together with all declared and unpaid dividends.

The quarterly dividend of $0.2399375 per Series 32 Share declared on December 3, 2024 is the final dividend on the Series 32 Shares, and is payable in the usual manner on February 15, 2025 to shareholders of record on January 6, 2025, as previously announced.

Since February 15, 2025, is not a business day, amounts due to holders of the Series 32 Shares on that date will be paid on the first business day following that date, namely, Monday, February 17, 2025.

The redemption has been approved by the Office of the Superintendent of Financial Institutions. Formal notice will be given to holders of the Series 32 Shares in accordance with the terms of the Series 32 Shares.

The redemption of the Series 32 Shares is part of the Bank’s ongoing management of its regulatory capital.

NA.PR.W was issued as a FixedReset, 3.90%+225, that commenced trading 2014-10-9 after being announced 2014-9-30. The company announced the extension on 2019-12-19. NA.PR.W reset at 3.839% effective February 16, 2020. I recommended against conversion and there was no conversion. The issue is tracked by HIMIPref™ and is assigned to the FixedReset (Discount) subindex.

Canadian Imperial Bank of Commerce has announced:

its intention to redeem all of its issued and outstanding Non-cumulative Rate Reset Class A Preferred Shares Series 41 (Non-viability contingent capital (NVCC)) (Series 41 shares) (TSX: CM.PR.P), for cash. The redemption will occur on January 31, 2025. The redemption price is $25.00 per Series 41 share.

The $0.244313 quarterly dividend announced on December 5, 2024 will be the final dividend on the Series 41 shares and will be paid on January 28, 2025, covering the period to January 31, 2025, to shareholders of record on December 27, 2024.

Holders of the Series 41 shares should contact the financial institution, broker or other intermediary through which they hold the shares to confirm how they will receive their redemption proceeds.

CM.PR.P is a FixedReset, 3.75%+224, that commenced trading 2014-12-16 after being announced 2014-12-8. In December, notice of extension was published. CM.PR.P will reset at 3.909% effective January 31, 2020. I recommended against conversion and there was no conversion. The issue is tracked by HIMIPref™ and is assigned to the FixedReset-Discount subindex.

Quadravest has announced:

Dividend 15 Split Corp. (the “Company”) invests in a high-quality portfolio consisting of 15 leading Canadian dividend-yielding stocks. The top five holdings currently held in the portfolio are as follows: Royal Bank of Canada, Manulife Financial Corp., Canadian Imperial Bank of Commerce, Sun Life Financial Inc. and TC Energy Corp.

The recent extension of the Company’s termination date included a retraction right for Class A shareholders and Preferred shareholders. The Company will not require a rebalance of shares and all retraction rights have been satisfied.

The Company may use the normal course issuer to repurchase Class A shares at or below intrinsic value. The current intrinsic value exceeds $6.80 per share.

As previously announced, the annual dividend rate for the Preferred Shares has been set at 7.00% for the fiveyear renewal period effective December 1, 2024. The dividend policy for the Class A Shares will remain at the current targeted rate of $0.10 per share monthly, or $1.20 per annum.

Some details would be appreciated! Like, how many shares of each class were retracted? I wouldn’t expect many preferreds got retracted, given that the issue has been trading over par for the past three months, but what about the Capital Units? Inquiring minds want to know!

The terms of the extension were reported on PrefBlog.

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

Quadravest has announced:

Dividend 15 Split Corp. II (the “Company”) invests
in a high-quality portfolio consisting of 15 leading Canadian dividend-yielding stocks. The top five holdings currently held in the portfolio are as follows: Manulife Financial Corp., Canadian Imperial Bank of Commerce, Royal Bank of Canada, National Bank of Canada and Sun Life Financial Inc.

The recent extension of the Company’s termination date included a retraction right for Class A shareholders and Preferred shareholders. The Company will not require a rebalance of shares and all retraction rights have been satisfied.

The Company may use the normal course issuer to repurchase Class A shares at or below intrinsic value. The current intrinsic value exceeds $7.00 per share.

As previously announced, the annual dividend rate for the Preferred Shares has been set at 7.00% for the fiveyear renewal period effective December 1, 2024. The dividend policy for the Class A Shares will remain at the current targeted rate of $0.10 per share monthly, or $1.20 per annum.

Some details would be appreciated! Like, how many shares of each class were retracted? I wouldn’t expect many preferreds got retracted, given that the issue has been trading over par for the past three months, but what about the Capital Units? Inquiring minds want to know!

The terms of the extension were reported on PrefBlog.

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

Quadravest has announced:

North American Financial 15 Split Corp. (the “Company”) invests in a high-quality portfolio consisting of 15 financial services companies made up of 40% Canadian and 60% U.S. issuers. The top five holdings currently held in the portfolio are as follows: JP Morgan Chase & Co., Goldman Sachs Group, Morgan Stanley, Wells Fargo & Co., and Bank of America.

The recent extension of the Company’s termination date included a retraction right for Class A shareholders and Preferred shareholders. The Company will not require a rebalance of shares and all retraction rights have been satisfied.

The Company may use the normal course issuer to repurchase Class A shares at or below intrinsic value. The current intrinsic value exceeds $8.00 per share.

As previously announced, the annual dividend rate for the Preferred Shares has been set at 8.75% (subject to a 5-year minimum of 7%). The dividend policy for the Class A Shares will remain at the current targeted rate of $0.11335 per month, or $1.36 per annum.

This retraction potential existed due to the extension of the fund’s term, which came with special retraction provisions.

As IrateAR remarks, the Capital Units have shown:

crazy price moves in that one the last few days.

… which may be the reason Quadravest saw fit to issue the above press release – nothing has yet been disclosed for other extended issues DF.PR.A, LFE.PR.B, FTN.PR.A and DFN.PR.A.

FFN showed a 2024-12-11 VWAP of 7.26 on normal volume of a little under 300,000 shares, but on 2024-12-12, volume spiked to nearly 700,000 shares with a VWAP of 7.12. Today’s VWAP was 7.04 (and it closed much higher) on volume of 1.36-million, which is all wild enough.

What makes it stranger is that, as hinted in the press release, the Capital Units are trading below intrinsic value – the NAVPU was 18.29 on 2024-11-29, so it’s easy to believe the claim that the current intrinsic value exceeds 8.00 per share. It’s not normal for a Capital Unit to trade below intrinsic! It is, effectively, a reasonably normal leveraged portfolio that is also long a put option (to the preferred shareholders, at a NAVPU strike price of 10.00) on the whole whack. To trade below intrinsic, Capital Unitholders would have to assign a value to the fees and expenses associated with the fund which, horrendous though they might be, are rarely accounted for.

So … something’s going on with the Capital Units that I don’t understand. Prior to the press release, it might have been uncertainty – a good sized consolidation of capital units would have:

• reduced the projected income of the shareholders, and
• decreased their leverage

both of which are considered undesirable. But, at around 2pm today the share price commenced to skyrocket, from the day’s low of about 6.85 to the close of 7.31; this was well after niagara posted the link to the press release (10:38am; I don’t know the time the press release itself was issued). So who knows? Maybe it was something as mundane as a big investor unloading a hatful of them (or a big retail advisor unloading on behalf of clients). If so, someone sure absorbed a high market impact cost for the privilege of getting out in a hurry.

Coming on top of DFN.PR.A’s high-volume price drop yesterday, it all leaves me quite befuddled!

Pembina Pipeline Corporation has announced:

its intention to redeem its issued and outstanding Cumulative Redeemable Floating Rate Class A Preferred Shares, Series 22 (“Series 22 Shares”) (TSX: PPL.PF.B) on January 8, 2025 (the “Redemption Date”).

Pembina intends to redeem all of its 1,028,130 issued and outstanding Series 22 Shares, in accordance with the terms of the Series 22 Shares, as set out in the Company’s articles of amendment dated December 1, 2017 on the Redemption Date for a redemption price equal to $25.50, plus all accrued and unpaid dividends thereon but excluding the Redemption Date per Series 22 Share (the “Redemption Price”), less any tax required to be deducted or withheld by the Company. The total redemption price to Pembina will be approximately $26 million.

The Company has provided notice today of the Redemption Price and the Redemption Date to the sole registered holder of the Series 22 Shares in accordance with the terms of the Series 22 Shares, as set out in the Company’s articles of amendment dated December 1, 2017. For non-registered holders of Series 22 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 22 Shares in which they hold a beneficial interest. The Company’s transfer agent for the Series 22 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.

The PPL.PF.B shares resulted from a partial conversion from PPL.PF.A, which was 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.

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In turn, PPL.PF.A was issued as a FixedReset 4.90%+326M490 that commenced trading 2017-12-7 after being announced 2017-11-28. It reset to 6.302% effective 2023-3-1. I regret to say that I missed the notice of conversion. PPL.PF.A is tracked by HIMIPref™, but has been relegated to the Scraps – FixedResets (Discount) subindex on credit concerns.

This is the first example I know of in which the ‘anytime redemption at a premium’ privilege generally attached to FloatingResets has been invoked – and there I was, thinking that it would never happen unless we returned to 1981 and saw Canadian policy rates spike to 21%. Shows how much I know!

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

Loblaw Companies Limited has announced:

its intention to redeem for cash all of its 9,000,000 outstanding Second Preferred Shares, Series B (the “Series B Shares”) on January 8, 2025 (the “Redemption Date”) at a redemption price equal to $25.00 per share, for an aggregate amount of $225 million, together with all accrued and unpaid dividends up to but excluding the Redemption Date in the amount of $0.02944 per Series B Share (collectively, the “Redemption Price”), less any tax required to be deducted and withheld by the Company.

Formal notice will be delivered to the sole registered holder of the Series B Shares in accordance with the terms of the Series B Shares contained in the Company’s articles.

The Series B Share redemption will not impact the Company’s previously announced quarterly dividend on the Series B Shares, payable on December 31, 2024 to shareholders of record on December 15, 2024. After the Series B Shares are redeemed, holders of Series B Shares will cease to be entitled to dividends and will not be entitled to exercise any rights as holders other than to receive the Redemption Price.

Non-registered holders of Series B Shares should contact their broker or other intermediary for information regarding the redemption process for the Series B Shares in which they hold a beneficial interest. The Company’s transfer agent for the Series B Shares is Computershare Trust Company of Canada (“Computershare”). Questions regarding the redemption process may be directed to Computershare at 1-800-564-6253 or by email to corporateactions@computershare.com.

Following the redemption on January 8, 2025, the Series B Shares will be delisted from and no longer trade on the Toronto Stock Exchange (“TSX”).

L.PR.B is a 5.30% Straight Perpetual commenced trading 2015-6-9 after being announced 2015-6-2. It has been tracked by HIMIPref™ but relegated to the Scraps index on credit concerns.

This was another market windfall, with the issue up 10.68% today on high volume.

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

BIP Investment Corporation, an indirect subsidiary of Brookfield Infrastructure Partners L.P., has announced (on 2024-12-02):

the voting results from the special meeting of holders of its senior preferred shares, series 1 (the “Preferred Shares”) held today in a virtual meeting format (the “Meeting”). BIPIC also announced that it intends to redeem all of the outstanding Preferred Shares for cash on December 5, 2024.

Results of Special Meeting

The special resolution (“Special Resolution”) to permit the redemption of the Preferred Shares by BIPIC at any time on not less than three business days’ notice for an amount in cash equal to C$26.75 per Preferred Share was approved by the holders of the Preferred Shares at the Meeting. Detailed voting results are set out below.

The following is a summary of the votes cast by holders of Preferred Shares with respect to the Special Resolution:

Votes For	%	Votes Against	%
451,956	80.30%	110,901	19.70%

A summary of all votes cast by holders of the Preferred Shares represented at the Meeting is available on SEDAR+ at https://sedarplus.ca/.

Redemption of Preferred Shares

BIPIC has provided notice of its intention to redeem all of the outstanding Preferred Shares for cash on December 5, 2024. The redemption price for each Preferred Share will be C$26.75. Holders of Preferred Shares of record as of November 29, 2024 will also receive the previously declared final quarterly dividend of $0.4671875 per Preferred Share on December 5, 2024.

The intention to vote was previously reported on PrefBlog.

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 AA (“Series AA Shares”) (TSX: BPO.PR.A).

If declared, the fixed quarterly dividends on the Series AA Shares for the five years commencing January 1, 2025 and ending December 31, 2029 will be paid at an annual rate of 6.164% ($0.38525 per share per quarter).

Holders of Series AA Shares have the right, at their option, exercisable not later than 5:00 p.m. (Toronto time) on December 16, 2024, to convert all or part of their Series AA Shares, on a one-for-one basis, into Class AAA Preference Shares, Series BB (the “Series BB Shares”), effective December 31, 2024.

The quarterly floating rate dividends on the Series BB Shares have an annual rate, calculated for each quarter, of 3.15% over the annual yield on three-month Government of Canada treasury bills. The actual quarterly dividend rate for the January 1, 2025 to March 31, 2025 dividend period for the Series BB Shares will be 1.63479% (6.6% on an annualized basis) and the dividend, if declared, for such dividend period will be $0.408698 per share, payable on March 31, 2025.

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

As provided in the share conditions of the Series AA Shares, (i) if Brookfield determines that there would be fewer than 1,000,000 Series AA Shares outstanding after December 31, 2024, all remaining Series AA Shares will be automatically converted into Series BB Shares on a one-for-one basis effective December 31, 2024; and (ii) if Brookfield determines that there would be fewer than 1,000,000 Series BB Shares outstanding after December 31, 2024, no Series AA Shares will be permitted to be converted into Series BB Shares. There are currently 11,845,858 Series AA Shares outstanding.

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

BPO.PR.A was issued as a FixedReset, 4.75%+315, that commenced trading 2014-10-23 after being announced 2014-10-7. BPO.PR.A reset at 4.709% effective 2020-1-1. There was no conversion. The issue is tracked by HIMIPref™ but relegated to the Scraps index on credit concerns.