Archive for the ‘Issue Comments’ Category

XTD.PR.A To Be Extended

Wednesday, March 13th, 2024

Quadravest has announced:

TDb Split Corp. (the “Company”) is pleased to announce it will extend the termination date of the Company a further five year period from December 1, 2024 to December 1, 2029.

The term extension allows holders of XTD Class A Shares (“Class A Shares”) to continue to receive ongoing leveraged exposure to a portfolio consisting of common stock of Toronto-Dominion Bank, as well as receiving targeted monthly distributions. Holders of the XTD.PR.A Priority Equity Shares (“Priority Equity Shares”) are expected to continue to benefit from cumulative preferential monthly distributions.

The extension of the term of the Company is not expected to be a taxable event and should enable shareholders to defer potential tax liability that would have otherwise been realized on the redemption of the Class A Shares or Priority Equity Shares at the end of the term, until such time as such shares are disposed of by shareholders.

In connection with the extension, the Company will have the right to amend the rate of cumulative preferential monthly dividends to be paid to the Priority Equity Shares for the five year renewal period, commencing December 1, 2024. Any change to the Priority Equity Share dividend rate for the extended term will be based on market yields for preferred shares with similar terms at such time and will be announced no later than September 30, 2024

In connection with the term extension, the Company will offer a non-concurrent Special Retraction Right which will allow existing shareholders to tender one or both classes of Shares and receive a retraction price based on the November 29, 2024 net asset value per unit.

The Company invests in common shares of Toronto-Dominion Bank, a leading Canadian Financial institution.

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

FFN.PR.A To Be Extended

Wednesday, March 13th, 2024

Quadravest has announced:

North American Financial 15 Split Corp. (the “Company”) is pleased to announce it will extend the termination date of the Company a further five year period from December 1, 2024 to December 1, 2029.

The term extension allows holders of FFN Class A Shares (“Class A Shares”) to continue to receive ongoing leveraged exposure to a portfolio consisting of high-quality financial services companies made up of Canadian and U.S. issuers, as well as receiving targeted monthly distributions. Since inception of the Company Class A shareholders have received monthly distributions totaling $16.16 per share.

Holders of the FFN.PR.A Preferred Shares (“Preferred Shares”) are expected to continue to benefit from cumulative preferential monthly distributions. The Preferred shareholders have received a total of $10.90 per share since inception.

The extension of the term of the Company is not expected to be a taxable event and should enable shareholders to defer potential capital gains tax liability that would have otherwise been realized on the redemption of the Class A Shares or Preferred Shares at the end of the term, until such time as such shares are disposed of by shareholders.

In connection with the extension, the Company will have the right to amend the minimum rate of cumulative preferential monthly dividends to be paid to the Preferred Shares for the five year renewal period, commencing December 1, 2024. Any change to the Preferred Share minimum dividend rate for the extended term will be based on market yields for preferred shares with similar terms at such time and will be announced no later than September 30, 2024. The Company has the right to establish the rate of cumulative preferential monthly dividends to be paid to the Preferred Shares on an annual basis.

In connection with the term extension, the Company will offer a non-concurrent Special Retraction Right which will allow existing shareholders to tender one or both classes of Shares and receive a retraction price based on the November 29, 2024 net asset value per unit.

The Company invests in a high quality portfolio consisting of 15 financial services companies made up of Canadian and U.S. issuers as follows: Bank of Montreal, The Bank of Nova Scotia, Canadian Imperial Bank of Commerce, Royal Bank of Canada, Toronto-Dominion Bank, National Bank of Canada, Manulife Financial Corporation, Sun Life Financial, Great-West Lifeco, CI Financial Corp, Bank of America, Citigroup Inc., Goldman Sachs Group, JP Morgan Chase & Co. and Wells Fargo & Co.

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

DF.PR.A To Be Extended

Wednesday, March 13th, 2024

Quadravest has announced:

Dividend 15 Split Corp. II (the “Company”) is pleased to announce it will extend the termination date of the Company a further five year period from December 1, 2024 to December 1, 2029.

The term extension allows holders of DF Class A Shares (“Class A Shares”) to continue to receive ongoing leveraged exposure to a portfolio consisting of high-quality Canadian dividend yielding stocks as well as receiving targeted monthly distributions. Since inception of the Company Class A shareholders have received monthly distributions totaling $14.70 per share.

Holders of the DF.PR.A Preferred Shares (“Preferred Shares”) are expected to continue to benefit from cumulative preferential monthly distributions. The Preferred shareholders have received a total of $9.29 per share since inception.

The extension of the term of the Company is not expected to be a taxable event and should enable shareholders to defer potential capital gains tax liability that would have otherwise been realized on the redemption of the Class A Shares or Preferred Shares at the end of the term, until such time as such shares are disposed of by shareholders.

In connection with the extension, the Company will have the right to amend the rate of cumulative preferential monthly dividends to be paid to the Preferred Shares for the five year renewal period, commencing December 1, 2024. Any change to the Preferred Share dividend rate for the extended term will be based on market yields for preferred shares with similar terms at such time and will be announced no later than September 30, 2024

In connection with the term extension, the Company will offer a non-concurrent Special Retraction Right which will allow existing shareholders to tender one or both classes of Shares and receive a retraction price based on the November 29, 2024 net asset value per unit.

The Company invests in a high quality portfolio of leading Canadian dividend-yielding stocks as follows: Bank of Montreal, Bank of Nova Scotia, Canadian Imperial Bank of Commerce, Royal Bank of Canada, TorontoDominion Bank, National Bank of Canada, CI Financial Corp., BCE Inc., Manulife Financial, Enbridge, Sun Life Financial, TELUS Corporation, Thomson Reuters Corporation, TransAlta Corporation, TC Energy Corp.

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

DFN.PR.A To Be Extended

Wednesday, March 13th, 2024

Quadravest has announced:

Dividend 15 Split Corp. (the “Company”) is pleased to announce it will extend the termination date of the Company a further five year period from December 1, 2024 to December 1, 2029.

The term extension allows holders of DFN Class A Shares (“Class A Shares”) to continue to receive ongoing leveraged exposure to a portfolio consisting of high-quality Canadian dividend yielding stocks as well as receiving targeted monthly distributions. Since inception of the Company Class A shareholders have received monthly distributions totaling $26.60 per share (including five special distributions of $0.25 per share, one special distribution of $0.50 per share and one special stock dividend of $1.75 per share).

Holders of the DFN.PR.A Preferred Shares (“Preferred Shares”) are expected to continue to benefit from cumulative preferential monthly distributions. The Preferred shareholders have received a total of $10.58 per share since inception.

The extension of the term of the Company is not expected to be a taxable event and should enable shareholders to defer potential capital gains tax liability that would have otherwise been realized on the redemption of the Class A Shares or Preferred Shares at the end of the term, until such time as such shares are disposed of by shareholders.

In connection with the extension, the Company will have the right to amend the rate of cumulative preferential monthly dividends to be paid to the Preferred Shares for the five year renewal period, commencing December 1, 2024. Any change to the Preferred Share dividend rate for the extended term will be based on market yields for preferred shares with similar terms at such time and will be announced no later than September 30, 2024.

In connection with the term extension, the Company will offer a non-concurrent Special Retraction Right which will allow existing shareholders to tender one or both classes of Shares and receive a retraction price based on the November 29, 2024 net asset value per unit.

The Company invests in a high quality portfolio of leading Canadian dividend-yielding stocks as follows: Bank of Montreal, Bank of Nova Scotia, Canadian Imperial Bank of Commerce, Royal Bank of Canada, TorontoDominion Bank, National Bank of Canada, CI Financial Corp., BCE Inc., Manulife Financial, Enbridge Inc., Sun Life Financial, TELUS Corporation, Thomson Reuters Corporation, TransAlta Corporation, TC Energy Corp.

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

TD.PF.L To Be Redeemed

Tuesday, March 12th, 2024

The Toronto-Dominion Bank has announced:

that it will exercise its right to redeem all of its 14,000,000 outstanding Non-Cumulative 5-Year Rate Reset Class A First Preferred Shares, Series 22 (Non-Viability Contingent Capital) (the “Series 22 Shares”) on April 30, 2024 at the price of $25.00 per Series 22 Share for an aggregate total of approximately $350 million. The redemption has been approved by the Office of the Superintendent of Financial Institutions.

On February 29, 2024, TD announced that dividends of $0.325 per Series 22 Share had been declared. These will be the final dividends on the Series 22 Shares, and will be paid in the usual manner on April 30, 2024 to shareholders of record on April 9, 2024, as previously announced. After April 30, 2024, the Series 22 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 22 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.L was issued as a FixedReset, 5.20%+327, that commenced trading 2019-1-28 after being announced 2019-01-17. It is currently assigned to the FixedReset-Discount subindex.

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

DGS.PR.A To Be Extended

Tuesday, March 12th, 2024

Brompton Funds has announced:

Dividend Growth Split Corp. (the “Fund”) is pleased to announce that the board of directors of the Fund has approved an extension of the maturity date of the class A shares (the “Class A Shares”) and preferred shares (the “Preferred Shares”) of the Fund. The current maturity date of September 27, 2024 will be extended for an additional term of approximately 5 years to August 30, 2029. The Preferred Share dividend rate for the extended term will be announced at least 60 days prior to the current September 27, 2024 maturity date and will be based on market yields for preferred shares with similar terms at that time. The term extension allows Class A shareholders to continue their investment with an attractive distribution rate of 20.5% based on the March 8, 2024 closing price, and the opportunity for capital appreciation.(1) The extension of the term of the Fund is not a taxable event and enables shareholders to defer potential capital gains tax liability that would have otherwise been realized on redemption of Class A Shares or Preferred Shares at the end of the term, until such time that shares are disposed of by shareholders.

Over the last 10 years to February 29, 2024, the Class A Share has delivered a 10.8% per annum return, which outperformed the S&P/TSX Composite Index by 3.4% per annum.(2) Since inception to February 29, 2024, Class A shareholders have received cash distributions of $15.99 per share. Class A shareholders also have the option to reinvest their cash distributions in a dividend reinvestment plan which is commission free to participants.

The term extension offers Preferred shareholders the opportunity to enjoy preferential cash dividends until August 30, 2029. Over the last 10 years to February 29, 2024, the Preferred Share has delivered a 5.5% per annum return, outperforming the S&P/TSX Preferred Share Index by 3.6% per annum with less volatility.(2)

The Fund invests, on an approximately equally-weighted basis, in a portfolio consisting primarily of equity securities of Canadian dividend growth companies. In addition, the Fund may hold up to 20% of the total assets of the portfolio in global dividend growth companies for diversification and enhanced return potential.

PVS Upgraded to Pfd-2 by DBRS

Friday, March 8th, 2024

DBRS Limited has announced that it:

upgraded its credit ratings on the Class AA Preferred Shares, Series 8; the Class AA Preferred Shares, Series 9; the Class AA Preferred Shares, Series 10; the Class AA Preferred Shares, Series 11; the Class AA Preferred Shares, Series 12; and the Class AA Preferred Shares, Series 13 (collectively, the Class AA Preferred Shares) issued by Partners Value Split Corp. (the Company) to Pfd-2 from Pfd-2 (low).

Previously, the Company’s portfolio (the Portfolio) consisted entirely of the Class A Limited Voting Shares of Brookfield Asset Management Inc. (Brookfield). However, in November 2022, Brookfield and Brookfield Asset Management Limited (BAM or the Manager) made an announcement regarding the public listing of the Manager and distribution of a 25% interest in Brookfield’s asset management business through the Manager. This transaction became effective on December 9, 2022, and resulted in the division of Brookfield into two publicly traded companies: (1) Brookfield Corporation (BN; Issuer Rating and Senior Notes and Debentures rated “A” and Preferred Shares rated Pfd-2 with Stable trends by Morningstar DBRS), which was previously named Brookfield Asset Management Inc.; and (2) Brookfield Asset Management Limited. As a result of this spinoff, Partners Value Split Corp. now holds shares of BN and BAM.

All series of Class AA Preferred Shares rank senior to the Capital Shares, the Class AAA Preferred Shares, and the Junior Preferred Shares, Series 1; the Junior Preferred Shares, Series 2; and the Junior Preferred Shares, Series 3 (collectively, the Junior Preferred Shares) and rank pari passu with all other Class AA Preferred Shares with respect to the payment of dividends and repayment of principal. Dividends from the Portfolio are used to fund the payment of interest on the debentures to the extent that any have been issued and to fund the payment of dividends on the Class AA Preferred Shares. Currently, there are no outstanding debentures in the Company.

Preferred shareholders of Class AA Preferred Shares are entitled to receive fixed cumulative dividends with a yield of 4.80%, 4.90%, 4.70%, 4.75%, 4.40%, and 4.45% on the issue price of $25 (listed in sequential order from Series 8 to Series 13). The Junior Preferred Shareholders are entitled to receive quarterly noncumulative cash distributions at an annual rate of 5% when declared by the board of directors. There is $295 million worth of Junior Preferred Shares currently outstanding. The Company’s Capital Shareholders will receive excess dividend income only after interest on the debentures, Class AA Preferred Share distributions, Junior Preferred Share distributions, and other Company expenses have been paid. Any capital appreciation of the BN and BAM shares will benefit the Capital Shareholders.

The Company has issued a limited number of Class A Voting Shares that rank senior to the Class AA Preferred Shares in respect of capital upon the Company’s dissolution, winding up, or insolvency. There are currently 100 of such shares outstanding with a book value of USD 8.00 each.

As of February 27, 2024, the asset coverage, downside protection, and dividend coverage stood at 8.9 times (x), 88.8%, and 2.8x, respectively. Because of the excess-only nature of both Junior Preferred Share and Capital Share dividends, there is no grind on the Portfolio. The Company receives dividends in U.S. dollars; consequently, there is risk that an appreciating Canadian dollar will cause the dividend coverage ratio to fall below 1.0x. In the event of a shortfall, the Company may sell some of the BN or BAM shares, engage in security lending, or write covered call options to generate sufficient income to satisfy its obligations to pay the Class AA Preferred Shares dividends. If the Company chooses to lend its holdings, the Portfolio would be exposed to the potential losses if the borrower defaults on its obligations to return the borrowed securities.

Given that the Company’s portfolio holds BN and BAM only and BN further owns 75% of BAM, the credit rating on the Company’s Class AA Preferred Shares is driven by the credit ratings on BN’s Preferred Shares. Because of the recent upgrade of the credit rating on BN’s Preferred Shares to Pfd-2 from Pfd-2 (low) in November 2023 and the Company’s stable performance in 2023, Morningstar DBRS upgraded the credit rating on the Company’s Class AA Preferred Shares to Pfd-2 from Pfd-2 (low).

The main constraints to the credit ratings are the following:

(1) The downside protection available to the Class AA Preferred Shareholders depends solely on the market value of BN and BAM shares held in the Portfolio, which could fluctuate over time.

(2) There is a lack of diversification, as the Portfolio is entirely made up of BN and BAM shares.

(3) Changes in BN and BAM’s dividend policies may result in reductions in Class AA Preferred Shares dividend coverage.

(4) Downside protection available to the Class AA Preferred Shares may be negatively affected by the retraction of the Junior Preferred Shares.

Affected issues are PVS.PR.F, PVS.PR.G, PVS.PR.H, PVS.PR.I, PVS.PR.J and PVS.PR.K.

AQN.PR.D To Reset To 6.853%

Tuesday, March 5th, 2024

Algonquin Power & Utilities Corp. has announced:

the applicable dividend rates, determined as of March 1, 2024, for its Cumulative Rate Reset Preferred Shares, Series D (the “Series D Preferred Shares”) and Cumulative Floating Rate Preferred Shares, Series E (the “Series E Preferred Shares”).

With respect to any Series D Preferred Shares that remain outstanding after April 1, 2024, holders thereof will be entitled to receive quarterly fixed cumulative preferential cash dividends, if, as and when declared by the board of directors of the Company (the “Board”). The dividend rate for the 5-year period from and including March 31, 2024 to but excluding March 31, 2029 will be 6.853%, being equal to the 5-year Government of Canada bond yield determined as of March 1, 2024 plus 3.28%, in accordance with the terms of the Series D Preferred Shares.

With respect to any Series E Preferred Shares that may be issued on April 1, 2024, holders thereof will be entitled to receive quarterly floating rate cumulative preferential cash dividends, if, as and when declared by the Board. The dividend rate for the 3-month floating rate period from and including March 31, 2024 to but excluding June 30, 2024 will be 8.261%, being equal to the 3-month Government of Canada Treasury Bill yield determined as of March 1, 2024 plus 3.28%, calculated on the basis of the actual number of days in such quarterly period divided by 365, in accordance with the terms of the Series E Preferred Shares.

Beneficial owners of Series D Preferred Shares who wish to exercise their conversion right should communicate with their broker or other nominee to ensure their instructions are followed so that the registered holder of the Series D Preferred Shares can meet the deadline to exercise such conversion right, which is 5:00 p.m. (EST) on March 18, 2024.

AQN.PR.D was issued as a FixedReset, 5.00%+328, that commenced trading 2014-3-5 after being announced 2014-2-24. The extension was announced 2019-2-26 and the reset to 5.091% effective March 31, 2019 was announced 2019-3-1. I recommended against conversion and there was no conversion. Notice of extension was issued in 2024. The issue is tracked by HIMIPref™ but relegated to the Scraps-FixedReset (Discount) subindex on credit concerns.

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

BIK.PR.A To Reset To 7.475%

Monday, March 4th, 2024

Brookfield Infrastructure Partners L.P. (“Brookfield Infrastructure”) (NYSE: BIP; TSX: BIP.UN) today announced that BIP Investment Corporation (“BIPIC”), a wholly-owned subsidiary of Brookfield Infrastructure, has determined:

the fixed dividend rate on its Senior Preferred Shares, Series 1 (“Series 1 Shares”) (TSX: BIK.PR.A) for the five years commencing April 1, 2024 and ending March 31, 2029.

Series 1 Shares and Series 2 Shares

If declared, the fixed quarterly dividends on the Series 1 Shares during the five years commencing April 1, 2024 will be paid at an annual rate of 7.475% ($0.4671875 per share per quarter).

Holders of Series 1 Shares have the right, at their option, exercisable not later than 5:00 p.m. (Toronto time) on March 18, 2024, to convert all or part of their Series 1 Shares, on a one-for-one basis, into Senior Preferred Shares, Series 2 (“Series 2 Shares”), effective March 31, 2024.

The quarterly floating rate dividends on the Series 2 Shares will be paid at 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 in respect of the April 1, 2024 to June 30, 2024 dividend period for the Series 2 Shares will be 2.22913% (8.941% on an annualized basis) and the dividend, if declared, for such dividend period will be $0.5572825 per share, payable on June 30, 2024.

Holders of Series 1 Shares are not required to elect to convert all or any part of their Series 1 Shares into Series 2 Shares.

As provided in the share provisions of the Series 1 Shares, (i) if BIPIC determines that there would be fewer than 500,000 Series 1 Shares outstanding after March 31, 2024, all remaining Series 1 Shares will be automatically converted into Series 2 Shares on a one-for-one basis effective March 31, 2024; or (ii) if BIPIC determines that there would be fewer than 500,000 Series 2 Shares outstanding after March 31, 2024, no Series 1 Shares will be converted into Series 2 Shares. There are currently 4,000,000 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 BIPIC fulfilling all the listing requirements of the TSX.

About Brookfield Infrastructure

Brookfield Infrastructure is a leading global infrastructure company that owns and operates high-quality, long-life assets in the utilities, transport, midstream and data sectors across the Americas, Asia Pacific and Europe. We are focused on assets that have contracted and regulated revenues that generate predictable and stable cash flows. Investors can access its portfolio either through Brookfield Infrastructure Partners L.P. (NYSE: BIP; TSX: BIP.UN), a Bermuda-based limited partnership, or Brookfield Infrastructure Corporation (NYSE, TSX: BIPC), a Canadian corporation. Further information is available at https://bip.brookfield.com.

Brookfield Infrastructure is the flagship listed infrastructure company of Brookfield Asset Management, a global alternative asset manager with over US$900 billion of assets under management. For more information, go to https://brookfield.com.

BIK.PR.A was issued as a FixedReset, 5.85%+396M585, that commenced trading 2019-02-05 after being announced 2019-1-29. It is tracked by HIMIPref™ and is assigned to the FixedReset (Discount) sub-index.

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

BN.PF.B To Reset At 6.145%

Monday, March 4th, 2024

Brookfield Corporation has announced:

that it has determined the fixed dividend rate on its Cumulative Class A Preference Shares, Series 34 (“Series 34 Shares”) (TSX: BN.PF.B) for the five years commencing April 1, 2024 and ending March 31, 2029.

If declared, the fixed quarterly dividends on the Series 34 Shares during the five years commencing April 1, 2024 will be paid at an annual rate of 6.145% ($0.3840625 per share per quarter).

Holders of Series 34 Shares have the right, at their option, exercisable not later than 5:00 p.m. (Toronto time) on March 18, 2024, to convert all or part of their Series 34 Shares, on a one-for-one basis, into Cumulative Class A Preference Shares, Series 35 (the “Series 35 Shares”), effective March 31, 2024. The quarterly floating rate dividends on the Series 35 Shares will be paid at an annual rate, calculated for each quarter, of 2.63% over the annual yield on three-month Government of Canada treasury bills. The actual quarterly dividend rate in respect of the April 1, 2024 to June 30, 2024 dividend period for the Series 35 Shares will be 1.89754% (7.611% on an annualized basis) and the dividend, if declared, for such dividend period will be $0.474385 per share, payable on June 30, 2024.

Holders of Series 34 Shares are not required to elect to convert all or any part of their Series 34 Shares into Series 35 Shares.

As provided in the share conditions of the Series 34 Shares, (i) if Brookfield determines that there would be fewer than 1,000,000 Series 34 Shares outstanding after March 31, 2024, all remaining Series 34 Shares will be automatically converted into Series 35 Shares on a one-for-one basis effective March 31, 2024; and (ii) if Brookfield determines that there would be fewer than 1,000,000 Series 35 Shares outstanding after March 31, 2024, no Series 34 Shares will be permitted to be converted into Series 35 Shares. There are currently 9,876,735 Series 34 Shares outstanding.

The Toronto Stock Exchange (“TSX”) has conditionally approved the listing of the Series 35 Shares effective upon conversion. Listing of the Series 35 Shares is subject to Brookfield fulfilling all the listing requirements of the TSX.

BN.PF.B was issued as BAM.PF.B, a FixedReset, 4.20%+263, that commenced trading 2012-9-12 after being announced 2012-8-23. It reset to 4.437% effective 2019-4-1. I recommended against conversion and there was no conversion. The ticker changed to BN.PF.B in late 2022. The issue is tracked by HIMIPref™ and assigned to the FixedReset (Discount) sub-index.

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