Category: Miscellaneous News

A recent post prompted an interesting discussion in which Assiduous Reader RAV4guy told us:

Since RBC announced in August 2020 the redemption of 6 preferred issues with a par value of $1.5 billion I have kept a log of the ongoing redemptions and new issues by all issuers.

The announced redemption of FFH.PR.C/D is the 100th issue to have its redemption announced. The par value of these 100 redemptions is $28.077 billion.

Since August 2020 there have been 12 new issues and their par value is $2.022 billion. These new issues are:

4 Split Share: PVS.PR.I, PVS.PR.J, PVS.PR.K and PVS.PR.L
1 FRR with a floor: EMA.PR.J
7 Perpetuals: MIC.PR.A, EMA.PR.L, GWO.PR.Y, PWF.PR.A, CU.PR.J, IFC.PR.K and BEP.PR.R

The last two issues were BEP.PR.R in April 2022 and then PVS.PR.L in September 2024. No operating companies have issued preferred shares in over 2.5 years.

We all know that redemptions have greatly exceeded new issues over the past few years, but it’s breathtaking to see the numbers quantified!

RAV4guy has very kindly made his spreadsheet available to us, with technical assistance from Assiduous Reader FletcherLynd Here it is, in two formats:

• PDF
• .numbers (a spreadsheet file format from Apple. I know nothing about it.)

Thanks, RAV4guy & FletcherLynd!

In the 2023 Fall Economic Update, the Government of Canada announced:

Dividend Received Deduction by Financial Institutions – Exception

The Income Tax Act permits corporations to claim a deduction in respect of dividends received on shares of other corporations resident in Canada. Budget 2023 proposed to deny the dividend received deduction in respect of dividends received by financial institutions on shares that are mark-to-market property.

The 2023 Fall Economic Statement proposes an exception to this measure for dividends received on “taxable preferred shares” (as defined in the Income Tax Act). This exception, along with the rest of the measure, would apply to dividends received on or after January 1, 2024.

So the fears previously expressed that property insurers would stop buying (and maybe even sell! They’re about 12% of the market!) can be laid to rest. Until next time.

Thanks to Assiduous Reader Jason for bringing this to my attention! And thanks to peet for foreshadowing this announcement!

Update, 2024-5-16: See also: https://www.budget.canada.ca/fes-eea/2023/report-rapport/FES-EEA-2023-en.pdf

https://www.theglobeandmail.com/business/article-insurers-preferred-shares-tax-change/

On May 16, the Globe published a piece titled Property insurers warn proposed federal tax change to preferred shares could hurt the sector that has caused a fair amount of comment on the web and interest from Assiduous Readers. According to the Globe:

Louis Marcotte, Intact’s executive vice-president and chief financial officer, told The Globe and Mail that the company has been a significant investor in Canadian dividend-generating securities for decades, and is encouraging the government to “consult widely” on the proposed change to ensure it is supporting its “local market champions.”

“Most Canadian equity investments held by Canadian insurers like Intact Financial Corporation, are held for the long term with a view of providing a safe return for policy holders and investors,” Mr. Marcotte said in an e-mail. “The loss of the dividend deduction could have a knock-on effect on premiums but also on the availability and diversity of funding sources for Canadian corporations.”

The loss of income from the dividends deduction would effectively raise Intact’s tax rate by almost two percentage points, the company said.

“It also would increase the tax imbalance for us but also all Canadian insurers when facing their foreign counterparts,” Mr. Marcotte added.

Canadian property and casualty (P&C) insurers hold at least 12 per cent of all outstanding preferred shares in Canada – about $6-billion, according to a recent report by SLC Asset Management, Sun Life Financial’s asset-management division.

I discussed the proposed taxation change in the post Dividend Capture by Banks Now Less Profitable, but only in the context of dividend capture trading strategies. The Globe article highlights further-reaching possibilities.

So what are the implications of a potential exodus? I don’t think prices will be immediately affected: right now the market is extremely depressed – there hasn’t been much new issuance in the last three years, and that tells you something right there – and the institutions aren’t going to have a fire-sale of perfectly good assets just because the tax situation has changed unfavourably. What might happen is that any future ascent in prices gets slowed down because the holders sell into market strength, but I don’t think they’ll sell otherwise.

Liquidity will be adversely affected; but much more in the world of block-trades (more than 10,000 shares on a single ticket) and the dealer market (the proprietary traders at the big firms who make a significant portion of their paycheques by arranging these trades for their clients). At the retail level, which dominates the market so much that the average daily trading value for the universe is a mere $100,000, not so much.

A more insidious effect, I think, is that there will be some capital exiting the business. A decline in block trading will be a direct hit to dealer profits and the firms will react by reducing the amount of capital available to their proprietary desks. We saw this writ large during the Credit Crunch, when the prop-traders basically stopped doing business due to lack of capital and as a result there were enormous intra-day price swings, $1.00 gaps between successive trades, up to $2 range on a single day. Those days were glorious for those among us who supply liquidity to the market in our modest way: to some extent I see this happening again.

Another source of liquidity in the market that may be affected is ETF arbitrage. There are a few players who spend a great deal of time exploiting the equation “ETF-1 + ShareBasketA – ShareBasketB = ETF-2” and trading accordingly. A decline in liquidity will disproportionately hurt them and if they can’t make any money with a fully hedged position they’ll have to find some other market to play in.

A decline in liquidity and a shortage of big buyers will also mean that issue sizes will tend to shrink. We’ve seen some massive issues over the past decade – e.g., TRP.PR.K, $500MM, 2016, redeemed in 2022; TD.PF.H, 1,000MM, 2016, redeemed in 2021; TD.PF.G, $700MM, 2016, redeemed in 2021. I don’t think we’ll be seeing that kind of size very often if 12% of the market takes its ball and goes home.

And really, that’s all I got. Our illiquid market will become a little more illiquid, helped along by OSFI’s determination to create an OTC preferred share market (dealt a blow by the proposed tax change?) for institutional investors (see this comment). But there should be no adverse price effects relative to the current subterranean levels; perhaps a slower ascent on the way back up; and probably a greater degree of intra-day volatility.

I hadn’t been aware of the following wrinkle, brought to my attention by the 2023 Federal Budget : Tax Measures : Supplementary Information:

The Income Tax Act permits corporations to claim a deduction in respect of dividends received on shares of other corporations resident in Canada. These dividends are effectively excluded from income. The dividend received deduction is intended to limit the imposition of multiple levels of corporate taxation.

The mark-to-market rules in the Income Tax Act recognize the unique nature of certain property (“mark-to-market property”) held by financial institutions in the ordinary course of their business. Under these rules, gains on the disposition of mark-to-market property are included in ordinary income, not capital gains, and unrealized gains are included in computing income annually (in addition to when the property is disposed of). Shares are generally mark-to-market property when a financial institution has less than ten per cent of the votes or value of the corporation that issued the shares (“portfolio shares”).

The policy behind the dividend received deduction conflicts with the policy behind the mark-to-market rules. Although the mark-to-market rules essentially classify gains on portfolio shares as business income, dividends received on those shares remain eligible for the dividend received deduction and are excluded from income. The tax treatment of dividends received by financial institutions on portfolio shares held in the ordinary course of their business is inconsistent with the tax treatment of gains on those shares under the mark-to-market rules.

To align the treatment of dividends and gains on portfolio shares under the mark-to-market rules, Budget 2023 proposes to deny the dividend received deduction in respect of dividends received by financial institutions on shares that are mark-to-market property.

This measure would apply to dividends received after 2023.

It seems that Dividend Capture has been very profitable for trading desks! The revenue impact of this change is estimated at about $800-million per year. I have updated my post Research: Dividend Capture.

Update, 2023-5-18 I have clarified on FWF that:

I mean basically the same thing as you do by dividend capture, although I do not insist that the sale be executed on the very next day. When I read of the tax change though, it was this type of trading that occurred to me as being much more profitable than I had previously thought, since the dealers have been making untaxed revenue on the dividends but (I presume – I’m not a tax guy) still being able to claim the (hopefully lower) capital loss. Nice business!

The $800-million figure refers to the incremental tax income for the entirety of dividends affected (including portfolio shares held by insurers), not just those resulting from the Dividend Capture strategy and the source is the federal budget

This is very old news at this point, but better late than never!

Canoe Financial has announced (on 2020-4-9) that it:

reached an agreement under which Canoe Financial will acquire the rights to manage all of Fiera Investments’ retail mutual funds listed below (the “Mutual Funds”), representing approximately $1.14 billion in assets. The transaction is expected to close on or about the end of the second quarter of 2020, subject to receipt of all necessary approvals.

Regulatory approval was granted 2020-6-17:

The principal regulator is satisfied that the decision meets the test set out in the Legislation for the principal regulator to make the decision.

The decision of the principal regulator under the Legislation is that the Approvals Sought are granted.

As a result “Fiera Canadian Preferred Share Class” was merged into “Canoe Preferred Share Portfolio Class”, a new Canoe Portfolio Class Fund to be created prior to the Merger Date consisting of Canoe Preferred Share Class and units of Canoe Trust Fund.

Accordingly, the acquisition closed on 2020-6-26.

The new fund has been assigned a page on the Canoe Financial website with an inception date of July, 2020.

The Federal Reserve has announced:

The coronavirus outbreak has harmed communities and disrupted economic activity in many countries, including the United States. Global financial conditions have also been significantly affected. Available economic data show that the U.S. economy came into this challenging period on a strong footing. Information received since the Federal Open Market Committee met in January indicates that the labor market remained strong through February and economic activity rose at a moderate rate. Job gains have been solid, on average, in recent months, and the unemployment rate has remained low. Although household spending rose at a moderate pace, business fixed investment and exports remained weak. More recently, the energy sector has come under stress. On a 12‑month basis, overall inflation and inflation for items other than food and energy are running below 2 percent. Market-based measures of inflation compensation have declined; survey-based measures of longer-term inflation expectations are little changed.

Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The effects of the coronavirus will weigh on economic activity in the near term and pose risks to the economic outlook. In light of these developments, the Committee decided to lower the target range for the federal funds rate to 0 to 1/4 percent. The Committee expects to maintain this target range until it is confident that the economy has weathered recent events and is on track to achieve its maximum employment and price stability goals. This action will help support economic activity, strong labor market conditions, and inflation returning to the Committee’s symmetric 2 percent objective.

The Committee will continue to monitor the implications of incoming information for the economic outlook, including information related to public health, as well as global developments and muted inflation pressures, and will use its tools and act as appropriate to support the economy. In determining the timing and size of future adjustments to the stance of monetary policy, the Committee will assess realized and expected economic conditions relative to its maximum employment objective and its symmetric 2 percent inflation objective. This assessment will take into account a wide range of information, including measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial and international developments.

The Federal Reserve is prepared to use its full range of tools to support the flow of credit to households and businesses and thereby promote its maximum employment and price stability goals. To support the smooth functioning of markets for Treasury securities and agency mortgage-backed securities that are central to the flow of credit to households and businesses, over coming months the Committee will increase its holdings of Treasury securities by at least $500 billion and its holdings of agency mortgage-backed securities by at least $200 billion. The Committee will also reinvest all principal payments from the Federal Reserve’s holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities. In addition, the Open Market Desk has recently expanded its overnight and term repurchase agreement operations. The Committee will continue to closely monitor market conditions and is prepared to adjust its plans as appropriate.

Voting for the monetary policy action were Jerome H. Powell, Chair; John C. Williams, Vice Chair; Michelle W. Bowman; Lael Brainard; Richard H. Clarida; Patrick Harker; Robert S. Kaplan; Neel Kashkari; and Randal K. Quarles. Voting against this action was Loretta J. Mester, who was fully supportive of all of the actions taken to promote the smooth functioning of markets and the flow of credit to households and businesses but preferred to reduce the target range for the federal funds rate to 1/2 to 3/4 percent at this meeting.

In a related set of actions to support the credit needs of households and businesses, the Federal Reserve announced measures related to the discount window, intraday credit, bank capital and liquidity buffers, reserve requirements, and—in coordination with other central banks—the U.S. dollar liquidity swap line arrangements. More information can be found on the Federal Reserve Board’s website.

The last cut, by 50bp to a range of 1.00-1.25%, was announced on March 3. Well, nobody can accuse them of not taking the coronavirus seriously!

I will leave consideration of the question of whether this announcement is well suited to the Ides of March to the reader.

Update: They later announced technical measures to improve credit availability under the headings:

• Discount Window
• Intraday Credit
• Bank Capital and Liquidity Buffers
• Reserve Requirements

… and coordinated Central Bank action:

The Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank, the Federal Reserve, and the Swiss National Bank are today announcing a coordinated action to enhance the provision of liquidity via the standing U.S. dollar liquidity swap line arrangements.

These central banks have agreed to lower the pricing on the standing U.S. dollar liquidity swap arrangements by 25 basis points, so that the new rate will be the U.S. dollar overnight index swap (OIS) rate plus 25 basis points. To increase the swap lines’ effectiveness in providing term liquidity, the foreign central banks with regular U.S. dollar liquidity operations have also agreed to begin offering U.S. dollars weekly in each jurisdiction with an 84-day maturity, in addition to the 1-week maturity operations currently offered. These changes will take effect with the next scheduled operations during the week of March 16.1 The new pricing and maturity offerings will remain in place as long as appropriate to support the smooth functioning of U.S. dollar funding markets.

The swap lines are available standing facilities and serve as an important liquidity backstop to ease strains in global funding markets, thereby helping to mitigate the effects of such strains on the supply of credit to households and businesses, both domestically and abroad.

OK, so this doesn’t have much to do with preferred shares. But it is such a basic part of portfolio planning and so little known that I really should give it its own post. I mentioned last year’s version on May 25, 2015.

The Financial Planning Standards Council has announced:

and Institut québécois de planification financière (IQPF) have released updated unified Projection Assumption Guidelines for financial planners across Canada. Developed in 2015 by a committee of actuarial and financial planning professionals and updated annually, the Guidelines aid financial planners in making medium and long-term financial projections that are free from potential biases or predispositions.

The 2016 updates were completed with extensive feedback from financial planners across Canada and financial firms from across industry sectors. Based on feedback, additions incorporated into the 2016 Guidelines include:

• •Rate of return assumption guidelines for foreign developed market equities (including U.S. market and EAFE market equities) and emerging market equities, as well as rate of return assumption guidelines for short-term investments, Canadian fixed income and Canadian equities
• •Margins within which financial planners may deviate from the rate of return assumption guidelines, with explanation for how to apply the margins
• •Additional explanations for the rate of return assumption guidelines referenced in footnotes, as well as in the body of the report
• •Updated life expectancy information

The Projection Assumption Guidelines for 2016 are the following:

Inflation rate:	2.1%
Return rates
Short term:	3.0%
Fixed income:	4.0%
Canadian equities:	6.4%
Foreign developed market equities:	6.8%
Emerging market equities:	7.7%
YMPE or MPE growth rate	3.1%
Borrowing rate:	5.0%

To ensure full transparency and replicability, the Guidelines are drawn from four publicly available data sources: the Canada Pension Plan, Quebec Pension Plan, Willis Towers Watson portfolio managers’ survey, and historical data (based on the DEX 91-day T-bill index S&P/TSX, the DEX Universe Bond™ [Canadian bonds] index, the S&P/TSX [Canadian equities] index, the S&P 500 [U.S. equities] index, the MSCI EAFE [Europe, Australia, Far East] index and the MSCI Emerging Markets index).

“Updates to the Projection Assumption Guidelines ensure that financial planners are equipped with the current information to make financial projections,” says Joan Yudelson, FPSC Vice President of Professional Practice, “allowing them to project their clients’ progress toward meeting their life goals and provide appropriate financial planning advice to address any gaps.”

The 2016 Guidelines are in effect as of June 30, 2016. Full detail on the 2016 unified Projection Assumption Guidelines can be found here.

I must say, a nominal return of 4% for Fixed Income looks very optimistic, given that long Canadas yield 1.65% and long corporates are about 3.7%! The main document states that:

The Guidelines were set by combining assumptions from the following sources (each weighted at 25%):

• assumption used in the most recent QPP actuarial analysis, weighted as follows: 50% of the medium-term assumption (2013 to 2022) and 50% of the long-term assumption (2023 and later)
• assumption used in the most recent CPP actuarial report (2019 and later)
• result of the Willis Towers Watson annual portfolio managers’ survey, weighted as follows: 50% of the medium-term projection (year to year) and 50% of the long-term projection (year to year)
• historic returns over the 50 years ending the previous December 31st (adjusted for inflation) or dating back to inception of the index

The historical component is based on the DEX 91-day T-bill index S&P/TSX, the DEX Universe Bond™ (Canadian bonds) index, the S&P/TSX (Canadian equities) index, the S&P 500 (U.S. equities) index, the MSCI EAFE (Europe, Australia, Far East) index and the MSCI Emerging Markets index.

… and ….

The fixed income assumptions used in the most recent QPP and CPP actuarial reports have been adjusted to account for the opportunity of the QPP and CPP to buy and hold fixed income securities for significantly longer than the typical holding period of individuals. A margin of 0.75% is therefore deducted from the QPP and CPP actuarial assumptions to convert the long-term fixed income assumptions into a more relevant fixed income assumption for individual financial planning.

This does not fill my heart with comfort. Using historical returns as an input for fixed income projections is not an endeavor I would recommend to my friends (it can be justified with equities). Perhaps somebody would like to defend the 4% projection in the comments?

The actual document has material of further interest, including portfolio guidelines:

DBRS has touted their new insurance company rating methodology:

DBRS Limited (DBRS) has today released its “Global Methodology for Rating Life and P&C Insurance Companies and Insurance Organizations (December 2015)” after a public request for comment period. The new methodology considers several factors, including the increased complexity of insurance risks and regulation; major shifts and dynamics in competition across the diverse financial services space; regulatory environment evolution, particularly in respect of evolving views on the definitions of capital; and the growing global reach of internationally active insurance companies.

The methodology, which places a high emphasis on the prevailing regulatory and operating environments, is underpinned by the DBRS core rating philosophy of “rating through the cycle.” The unique approach outlined in the new methodology incorporates a transparent approach to the notching between the holding company and operating company ratings, as well as a clear qualitative and quantitative approach to assessing franchise strength, while incorporating other key analytical considerations, including earnings ability, liquidity, risk profile, capitalization and asset quality.
…
The methodology specifically addresses the rating of insurance holding companies by taking into consideration the unique aspects of these parent companies and the operating groups that they control, considering various characteristics, including their diversified holdings, capital structure and cash flows.

Given an existing FSR at the operating company, the parent holding company would typically be notched down two notches from this FSR to reflect structural subordination under this new methodology. Ratings of a holding company’s debt and preferred shares depend on the FSR at its operating company, which then serves as the anchor point for the rating of the various capital instruments at the operating company and the holding company. Existing insurance company ratings and related ratings of insurance holding companies were revised.

The methodology itself is titled Global Methodology for Rating Life and P&C Insurance Companies and Insurance Organizations:

Impact of Related Methodologies and Criteria – Final Rating and Ratings for Specific Securities

Once DBRS has determined the initial FSR of the insurer, several other methodologies and criteria are employed to determine the final FSR and ratings for specific classes of securities from senior debt to preferred shares. As discussed in these methodologies, the final rating will consider aspects such as the support assessment (or pressure) of applicable sovereign governments and appropriate notching for the holding company, ranking and contingent risk considerations.
…
Operating Company Ranking of Creditors

This global insurance methodology generates an FSR for the main operating insurance company based on information applicable
to the consolidated group. In jurisdictions where policyholder claims rank above senior and subordinated debt, this claim superiority will be recognized in the notching with reference to the ranking of the various classes of creditors noted below.

General method of ranking (for a standard operating insurance company):
1a. FSR: Credit risk evaluation of the policyholders’ risk of the company’s expected future probability of failing to honour undisputed claims or benefit payments as per the policy contract.
1b. Issuer Rating: The FSR rating will also be the Issuer Rating for the operating insurance company.
2. Senior Debt Rating: FSR minus one notch (if no senior debt will be issued because of regulatory disadvantage and management practice, this placeholder notching for senior debt could be ignored, uplifting the subordinated debt rating, etc.).
3. Sub-Debt Rating: FSR minus two notches.
4. Preferred Shares Rating: FSR minus three notches.

Holding Company Notching

In determining the appropriate rating of holding company debt, DBRS will notch from the FSR of the operating insurance company in accordance with the following general guidelines. While a rating differential between the FSR of the operating insurance company and the rating of the holding company’s senior debt is typically two notches, it can range from zero to four notches or more depending on a number of factors. Such factors include:
• Legal structure and management of the insurance group,
• Diversity of subsidiary operating businesses and their contributions to the strength of the holding company,
• Consistency of dividends from operating businesses as well as the assessment of regulatory upstream dividend constraints and the liquidity of operating companies,
• Stand-alone liquidity of the holding company to meet capital servicing charges,
• Holding company access to funds to pay fixed holding company charges and rollover funding,
• Consolidated financial leverage measures,
• Double leverage ratio (please refer to definitions in the Appendix 2),
• Consolidated fixed-charge coverage ratio,
• Presence of a common regulator for the holding company and operating company, resulting in coordination of regulation and
regulatory action,
• Low solvency ratios in operating subsidiaries, limiting the ability to pay dividends regardless of the regulatory approval process and
• If the operating company’s FSR is rated BBB high or lower, an assessment will be made that may determine a greater than two notch differential for the holding company.

The holding company’s investment in subsidiaries is primarily equity based, which creates a structural subordination for holding company debtholders. DBRS recognizes that this structural subordination will only be realized in the event of the operating company being declared insolvent and, following the creditor adjudication process, the holding company debt investors may find that their claim is treated with the ranking of an equity holder of the operating subsidiary.

By rating the holding company’s senior debt at least two or more notches below the FSR of the main operating company, the senior and subordinated debt of the holding company is always at least one notch lower than the operating company’s senior and subordinated debt. In jurisdictions where operating companies do not typically issue senior debt, the operating company’s subordinated debt may be rated one notch below the FSR. In this case, the holding company’s senior debt will likely be rated one notch below the operating company’s subordinated debt. Maintaining a notching difference between the operating company’s debts and holding company’s debts will communicate to the investor that there is a ranking and recovery difference between similar debt tranches of the holding company and operating company.

This pass-through of debt capital in the form of equity capital can be reflected in the double leverage ratio (for a definition of this ratio, please refer to Appendix 2). Regulatory environments can place limits when and if dividends can be paid to the holding company by the operating company. A restrictive regulatory environment with respect to dividends creates risk that the holding company may have difficulty meeting its capital servicing obligations. This and other factors that assist or hinder the holding company will be evaluated. Generally, the notching of the capital instruments for a holding company with a two-notch differential would have this pattern of notching for the various rankings of security instruments:

1. Parent Holding Company Issuer Rating – FSR minus two notches.
2. Holding Company Senior Debt – FSR minus two notches.
3. Holding Company Sub-Debt – FSR minus three notches.
4. Holding Company Preferred shares – FSR minus four notches.

The extent of the notching can vary with the restrictiveness of the regulatory and supervisory environment in terms of dividends and other payments. For example, as a result of U.S. regulatory dividend restrictions for insurance companies, the issuer rating for U.S. holding companies would typically be rated three notches below the FSR. For non-U.S. insurance holding companies that have significant U.S. insurance operations, the analysis would consider the parent holding company’s ability to access sufficient dividend income from other operations as well as the U.S. insurance subsidiaries.

On May 28, Fierra Capital announced:

that Canadian Preferred Share Trust (the “Fund”) has filed a preliminary prospectus dated May 27, 2015with the securities regulatory authorities of all of the Canadian provinces and territories for an initial public offering (the “Offering”) of Class A Units and Class F Units (collectively, the “Units”) of the Fund at a price of $10.00 per Unit. The Class F Units are designated for fee based and/or institutional accounts and will not be listed on a stock exchange but will be convertible into Class A Units on a weekly basis.
…
The Fund’s investment objectives are to provide holders of Units with monthly cash distributions, preserve capital and provide the opportunity for capital appreciation and reduce the risk of rising interest rates by managing portfolio duration. The Fund has been created to invest in an actively managed portfolio comprised primarily of Canadian preferred shares. The Fund’s distributions are initially targeted to be $0.0333 per Unit per month ($0.40 per annum) to yield 4.0% on the subscription price per Unit.

Fiera Capital is the manager, portfolio manager and promoter of the Fund. Fiera Capital is responsible for creating, structuring, managing and promoting the Fund and will also implement the Fund’s investment strategies.

The final prospectus was announced on June 23.

Exchange Ratios (when offering extant preferred shares in exchange for units of the fund; many, many different issues will be accepted) were announced June 24.

And on July 2 the issue closed:

Canadian Preferred Share Trust (the “Trust”) announces the closing of its initial public offering (the “Offering”) for aggregate gross proceeds of approximately $90 million. Pursuant to the Offering, the Trust issued Class A Units and Class F Units (together, the “Units”) at a price of $10.00per Unit. The Trust has granted the Agents an over-allotment option, exercisable for a period of 30 days from today’s date, to purchase up to an additional 1 million Class A Units.

The Class A Units are listed on the Toronto Stock Exchange under the symbol PFT.UN. The Class F Units are designated for fee based and/or institutional accounts and will not be listed on a stock exchange but will be convertible into Class A Units on a weekly basis.

The Trust’s investment objectives are to:

(i) provide holders of Units with monthly cash distributions;
(ii) preserve capital and provide the opportunity for capital appreciation; and
(iii) reduce the risk of rising interest rates by managing portfolio duration.

The Trust has been created to invest in an actively managed portfolio comprised primarily of Canadian preferred shares. The Trust’s distributions are initially targeted to be $0.0333 per Unit per month ($0.40 per annum) to yield 4.0% per annum on the subscription price per Unit.

Fiera Capital is the manager, portfolio manager and promoter of the Trust. Fiera Capital is responsible for creating, structuring, managing and promoting the Trust and will also implement the Trust’s investment strategies.

Fiera Capital is also the manager of National Bank Preferred Equity Fund, which used to be Altamira Preferred Equity Fund, which launched quietly in 2012.

Good luck!