Category: Issue Comments

Emera Incorporated has announced:

it does not intend to exercise its right to redeem all or any part of the currently outstanding Cumulative Rate Reset First Preferred Shares, Series F of the Company (the “Series F Shares”) on February 15, 2025. There are currently 8,000,000 Series F Shares outstanding.

Subject to certain conditions set out in the prospectus supplement of the Company dated June 2, 2014, to the short form base shelf prospectus dated May 2, 2013, relating to the issuance of the Series F Shares (collectively, the “Prospectus”), the holders of the Series F Shares have the right, at their option, to convert all or any of their Series F Shares, on a one-for-one basis, into Cumulative Floating Rate First Preferred Shares, Series G of the Company (the “Series G Shares”) on February 15, 2025 (the “Conversion Date”).

On such date, holders who do not exercise their right to convert their Series F Shares into Series G Shares will continue to hold their Series F Shares.

The foregoing conversion right is subject to the following:

• if the Company determines that there would be less than 1,000,000 Series G Shares outstanding on the Conversion Date, then holders of Series F Shares will not be entitled to convert their shares into Series G Shares, and
• alternatively, if the Company determines that there would remain outstanding less than 1,000,000 Series F Shares on the Conversion Date, then all remaining Series F Shares will automatically be converted into Series G Shares on a one-for-one basis on the Conversion Date.

In either case, Emera will give written notice to that effect to holders of Series F Shares at least seven days prior to the Conversion Date, subject to the terms set out in the Prospectus.

The dividend rate applicable for the Series F Shares for the five-year period commencing on February 15, 2025 and ending on (and inclusive of) February 14, 2030, and the dividend rate applicable to the Series G Shares for the 3-month period commencing on February 15, 2025 and ending on (and inclusive of) May 14, 2025, will be determined on January 16, 2025 and notice of such dividend rates shall be provided to the holders of the Series F Shares on that day.

Holders of Series F 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 16, 2025 until 5:00 p.m. (EST) on January 31, 2025. Any notices received after this deadline will not be valid. As such, it is recommended that this be done well in advance of the deadline in order to provide their broker or other nominee with adequate time to complete the necessary steps.

Holders of Series F Shares who do not provide notice or communicate with their broker or other nominee by the deadline will retain their Series F Shares and receive the new annual fixed dividend rate applicable to the Series F Shares, subject to the conditions stated above. Holders of Series F Shares will have the opportunity to convert their shares again on February 15, 2030 and every five years thereafter as long as the shares remain outstanding. For more information on the terms of, and risks associated with, an investment in Series F Shares and Series G Shares, please see the Company’s Prospectus, which is available on SEDAR+ at www.sedarplus.ca.

EMA.PR.F was issued as a FixedReset, 4.25%+263, that commenced trading 2014-6-9 after being being announced 2014-5-29. The company announced the extension on 2020-1-7. EMA.PR.F reset at 4.202% effective 2020-2-15. I recommended against conversion and there was no conversion. EMA.PR.F is tracked by HIMIPref™ but relegated to the Scraps – FixedReset Discount subindex on credit concerns.

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

TC Energy Corporation has announced:

that 42,200 of its 14,577,184 fixed rate Cumulative Redeemable First Preferred Shares, Series 1 (Series 1 Shares) have been elected for conversion on Dec. 31, 2024, on a one-for-one basis, into floating rate Cumulative Redeemable First Preferred Shares, Series 2 (Series 2 Shares); and 3,889,020 of its 7,422,816 Series 2 Shares have been elected for conversion, on a one-for-one basis, into Series 1 Shares.

As a result of the conversions, TC Energy will have 18,424,004 Series 1 Shares and 3,575,996 Series 2 Shares issued and outstanding. The Series 1 Shares and Series 2 Shares will continue to be listed on the Toronto Stock Exchange (TSX) under the symbols TRP.PR.A and TRP.PR.F, respectively.

The Series 1 Shares will pay on a quarterly basis for the five-year period beginning on Dec. 31, 2024, as and when declared by the Board of Directors of TC Energy, a fixed dividend at an annualized rate of 4.939 per cent.

The Series 2 Shares will pay a floating rate quarterly dividend for the five-year period beginning on Dec. 31, 2024, as and when declared by the Board of Directors of TC Energy. The dividend rate for the Series 2 Shares for the first quarterly floating rate period commencing Dec. 31, 2024 to but excluding Mar. 31, 2025 is 5.401 per cent and will be reset every quarter.

Holders of Series 1 Shares and Series 2 Shares will have the opportunity to convert their shares again on Dec. 31, 2029 and in every fifth year thereafter as long as the shares remain outstanding. 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 the prospectus supplement dated Sept. 22, 2009 which is available on sedarplus.ca or on our website.

So this was a net conversion of 17% from TRP.PR.F to TRP.PR.A. The pair is now 84% FixedReset, TRP.PR.A.

TRP.PR.A commenced trading 2009-9-30 after being announced 2009-9-22. It commenced life as a FixedReset, 4.60%+192, that reset to 3.266% effective 2014-12-31. Assiduous Readers may recall that I have blamed the 2014 reset of TRP.PR.A for what we might now call ‘the first half’ of the current bear market. I recommended conversion to TRP.PR.F in 2014 and there was a conversion rate of about 62%. The company announced the extension to 2024 on 2019-11-21. TRP.PR.A reset at 3.479% effective 2019-12-31. I recommended holding, or converting to, TRP.PR.A and there was a 23% net conversion to that issue. TRP.PR.A reset to 4.939% in 2024.

TRP.PR.F commenced trading 2014-12-31 after a partial conversion from TRP.PR.A.

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

The Toronto-Dominion Bank has announced:

that it will exercise its right to redeem all of its 20,000,000 outstanding Non-Cumulative 5-Year Rate Reset Class A First Preferred Shares, Series 5 (Non-Viability Contingent Capital) (the “Series 5 Shares”) on January 31, 2025 at the price of $25.00 per Series 5 Share for an aggregate total of approximately $500 million. The redemption has been approved by the Office of the Superintendent of Financial Institutions.

On December 5, 2024, TD announced that dividends of $0.24225 per Series 5 Share had been declared. These will be the final dividends on the Series 5 Shares, and will be paid in the usual manner on January 31, 2025 to shareholders of record on January 10, 2025, as previously announced. After January 31, 2025, the Series 5 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.

Beneficial holders who are not directly the registered holder of Series 5 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. Inquiries should be directed to our Registrar and Transfer Agent, TSX Trust Company, at 1-800-387-0825 (or in Toronto 416-682-3860).

TD.PF.C is a FixedReset, 3.75%+225, that commenced trading 2014-12-16 after being announced 2014-12-5. Notice of extension was reported in December, 2019. TD.PF.C will reset at 3.876% effective January 31, 2020. I recommended against conversion and there was no conversion. TD.PF.C is tracked by HIMIPref™ and is assigned to the FixedReset-Discount subindex.

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!