Category: New Issues

Manulife Financial Corporation has announced:

a Canadian public offering of Non-cumulative Rate Reset Class 1 Shares Series 11 (“Series 11 Preferred Shares”). Manulife will issue 8 million Series 11 Preferred Shares priced at $25 per share to raise gross proceeds of $200 million. The offering will be underwritten by a syndicate of investment dealers co-led by Scotiabank, RBC Capital Markets and TD Securities Inc. and is anticipated to qualify as Tier 1 capital for Manulife. The expected closing date for the offering is December 4, 2012. Manulife intends to file a prospectus supplement to its July 18, 2012 base shelf prospectus in respect of this issue.

Holders of the Series 11 Preferred Shares will be entitled to receive a non-cumulative quarterly fixed dividend yielding 4.00 per cent annually, as and when declared by the Board of Directors of Manulife, for the initial period ending March 19, 2018. Thereafter, the dividend rate will be reset every five years at a rate equal to the 5-year Government of Canada bond yield plus 2.61 per cent.

Holders of Series 11 Preferred Shares will have the right, at their option, to convert their shares into Non-cumulative Rate Reset Class 1 Shares Series 12 (“Series 12 Preferred Shares”), subject to certain conditions, on March 19, 2018 and on March 19 every five years thereafter. Holders of the Series 12 Preferred Shares will be entitled to receive non-cumulative quarterly floating dividends, as and when declared by the Board of Directors of Manulife, at a rate equal to the three-month Government of Canada Treasury Bill yield plus 2.61 per cent.

The net proceeds from the offering will be utilized for general corporate purposes, including refinancing of maturing debt and investment in subsidiaries.

“Our financing activities take into account future refinancing needs. We have taken the opportunity to issue preferred shares in favourable markets,” said Senior Executive Vice President and Chief Financial Officer, Steve Roder.

Enbridge Inc. has announced:

that it has entered into an agreement with a group of underwriters to sell 8 million cumulative redeemable preference shares, series R (the “Series R Preferred Shares”) at a price of $25.00 per share for distribution to the public. The aggregate gross proceeds will be $200 million. Closing of the offering is expected on December 5, 2012.

The holders of Series R Preferred Shares will be entitled to receive fixed cumulative dividends at an annual rate of $1.00 per share, payable quarterly on the 1st day of March, June, September and December, as and when declared by the Board of Directors of Enbridge, yielding 4.00 per cent per annum, for the initial fixed rate period to but excluding June 1, 2019. The first quarterly dividend payment date is scheduled for March 1, 2013. The dividend rate will reset on June 1, 2019 and every five years thereafter at a rate equal to the sum of the then five-year Canadian Government bond yield plus 2.50 per cent. The Series R Preferred Shares are redeemable by Enbridge, at its option, on June 1, 2019 and on June 1 of every fifth year thereafter.

The holders of Series R Preferred Shares will have the right to convert their shares into cumulative redeemable preference shares, series S (the “Series S Preferred Shares”), subject to certain conditions, on June 1, 2019 and on June 1 of every fifth year thereafter. The holders of Series S Preferred Shares will be entitled to receive quarterly floating rate cumulative dividends, as and when declared by the Board of Directors of Enbridge, at a rate equal to the sum of the then 90-day Government of Canada treasury bill rate plus 2.50 per cent.

Enbridge has granted to the underwriters an option, exercisable at any time up to 48 hours prior to the closing of the offering, to purchase up to an additional 2 million Series R Preferred Shares at a price of $25.00 per share.

The offering is being made only in Canada by means of a prospectus. Proceeds will be used to partially fund capital projects, to reduce existing indebtedness and for other general corporate purposes of the Corporation and its affiliates.

The syndicate of underwriters is co-led by Scotiabank, RBC Capital Markets, and TD Securities Inc.

Update: Upsized to $400-million:

Enbridge Inc. (TSX:ENB)(NYSE:ENB) today announced that as a result of strong investor demand for its previously announced offering of cumulative redeemable preference shares, series R (the “Series R Preferred Shares”), the size of the offering has been increased to 16 million shares. The aggregate gross proceeds will be CAD$400 million. Closing of the offering is expected on December 5, 2012.

The holders of Series R Preferred Shares will be entitled to receive fixed cumulative dividends at an annual rate of $1.00 per share, payable quarterly on the 1st day of March, June, September and December, as and when declared by the Board of Directors of Enbridge, yielding 4.00 per cent per annum, for the initial fixed rate period to but excluding June 1, 2019. The first quarterly dividend payment date is scheduled for March 1, 2013. The dividend rate will reset on June 1, 2019 and every five years thereafter at a rate equal to the sum of the then five-year Canadian Government bond yield plus 2.50 per cent. The Series R Preferred Shares are redeemable by Enbridge, at its option, on June 1, 2019 and on June 1 of every fifth year thereafter.

The holders of Series R Preferred Shares will have the right to convert their shares into cumulative redeemable preference shares, series S (the “Series S Preferred Shares”), subject to certain conditions, on June 1, 2019 and on June 1 of every fifth year thereafter. The holders of Series S Preferred Shares will be entitled to receive quarterly floating rate cumulative dividends, as and when declared by the Board of Directors of Enbridge, at a rate equal to the sum of the then 90-day Government of Canada treasury bill rate plus 2.50 per cent.

The offering is being made only in Canada by means of a prospectus. Proceeds will be used to partially fund capital projects, to reduce existing indebtedness and for other general corporate purposes of the Corporation and its affiliates.

The syndicate of underwriters is co-led by Scotiabank, RBC Capital Markets, and TD Securities Inc.

Update, 2012-11-27: Rated Pfd-2(low) by DBRS.

Innergex Renewable Energy has announced:

that it has entered into an agreement to issue, on a bought deal basis, to a syndicate of underwriters co-led by TD Securities Inc., National Bank Financial Inc. and BMO Capital Markets for distribution to the public, 2,000,000 Cumulative Redeemable Fixed-Rate Preferred Shares Series C (the “Series C Shares”). The Series C Shares will be issued at a price of $25.00 per Series C Share, for aggregate gross proceeds of $50,000,000. The underwriters will have an option to purchase up to an additional 300,000 Series C Shares from Innergex at a price of $25.00 per Series C Share, exercisable in whole or in part at any time for a period of up to 30 days following closing of the offering, which, if exercised in full, would increase the gross offering size to $57,500,000.

These funds will be used to repay a portion of the Corporation’s revolving term credit facility and for general corporate purposes.

Holders of the Series C Shares will be entitled to receive, as and when declared by the Board of Directors of Innergex, a cumulative quarterly fixed dividend yielding 5.75% annually. The Series C Shares will not be redeemable prior to January 15, 2018. On and after January 15, 2018 on not more than 60 nor less than 30 days’ notice, Innergex may, at its option, redeem all or from time to time any of the then outstanding Series C Shares upon payment in cash for each share so redeemed of an amount equal to $26.00 per share if redeemed on or prior to January 15, 2019; at $25.75 if redeemed thereafter and on or prior to January 15, 2020; at $25.50 if redeemed thereafter and on or prior to January 15, 2021; at $25.25 if redeemed thereafter and on or prior to January 15, 2022; and at $25.00 per share if redeemed thereafter; together, in each case, with all accrued and unpaid dividends to the date fixed for redemption. The Series C Shares will rank pari passu with all other series of preferred shares and in priority to common shares as to the payment of dividends and the distribution of assets on dissolution, liquidation, or wind-up.

The Series C Shares will be offered for sale to the public in each of the provinces of Canada pursuant to a short form prospectus to be filed with Canadian securities regulatory authorities. The offering of Series C Shares is expected to close on December 11, 2012, subject to regulatory approvals and other customary closing conditions.

Interestingly, the headline on the Innergex media page refers to an issue size of $75-million. Random mistake or last minute downsizing?

Update: DBRS calls it Pfd-3(low), Negative Trend.

Brookfield Asset Management has announced:

that it has agreed to issue 6,000,000 4.85% perpetual Class A Preferred Shares, Series 36 (“Preferred Shares”) on a bought deal basis to a syndicate of underwriters led by Scotiabank, CIBC, RBC Capital Markets and TD Securities Inc. for distribution to the public. The Preferred Shares will be issued at a price of CDN$25.00 per share, for aggregate gross proceeds of CDN$150,000,000.

Brookfield has granted the underwriters an option, exercisable until 48 hours prior to closing, to purchase up to an additional 2,000,000 Preferred Shares which, if exercised, would increase the gross offering size to CDN$200,000,000. The Preferred Shares will be offered in all provinces of Canada by way of a supplement to Brookfield Asset Management’s existing short form base shelf prospectus dated June 7, 2011 as amended on June 13, 2012. The Preferred Shares may not be offered or sold in the United States or to U.S. persons absent registration or an applicable exemption from the registration requirements under the U.S. Securities Act.

The net proceeds of the issue will be used for general corporate purposes. The offering of Preferred Shares is expected to close on or about November 27, 2012.

It’s nice to see another Straight Perpetual coming out – too bad it’s from BAM! They’ve got so many issues outstanding already … and their investment grade credit rating has been the subject of nervous announcements from DBRS and S&P.

Fortis Inc. has announced that it:

has today entered into an agreement with a syndicate of underwriters led by BMO Capital Markets and RBC Capital Markets under which the underwriters have agreed to purchase, on a bought deal basis, 6,000,000 Cumulative Redeemable First Preference Shares, Series J (the “Preference Shares”) for sale to the public at a price of $25.00 per Preference Share, representing aggregate gross proceeds of $150 million.

Fortis has granted the underwriters an underwriters’ option to purchase an additional 2,000,000 Preference Shares at the same offering price. Should the underwriters’ option be fully exercised, the total gross proceeds of the Preference Share offering will be $200 million.

Holders of Preference Shares will be entitled to receive a cumulative quarterly fixed dividend of 4.75% per annum, if, as and when declared by the Board of Directors of the Corporation payable (other than the first dividend payment) in equal quarterly instalments on the first day of March, June, September and December of each year. Assuming a closing date of November 13, 2012, the first dividend will be payable on March 1, 2013 in the amount of $0.35137 per Preference Share.

The Preference Shares are not redeemable prior to December 1, 2017. On or after December 1, 2017, the Corporation may, on not less than 30 nor more than 60 days’ notice, redeem the Preference Shares in whole or in part, at the Corporation’s option, by the payment in cash of $26.00 per Preference Share if redeemed prior to December 1, 2018, at $25.75 per Preference Share if redeemed on or after December 1, 2018 but prior to December 1, 2019, at $25.50 if redeemed on or after December 1, 2019 but prior to December 1, 2020, at $25.25 if redeemed on or after December 1, 2020 but prior to December 1, 2021 and at $25.00 per Preference Share if redeemed on or after December 1, 2021, in each case together with all declared and unpaid dividends up to but excluding the date fixed for redemption.

The Preference Share offering is expected to close on November 13, 2012. The Offering is subject to the receipt of all necessary regulatory and stock exchange approvals. The net proceeds from the issue will be used towards repaying borrowings under the Corporation’s $1 billion committed corporate credit facility, which borrowings were primarily incurred to support the construction of the non-regulated Waneta Expansion hydroelectric generating facility and for other general corporate purposes.

National Bank of Canada has announced:

that it has entered into an agreement with a group of underwriters led by National Bank Financial Inc. for an issue on a bought deal basis of 7 million non-cumulative 5-year rate reset first preferred shares series 28 (the “Series 28 Preferred Shares”), at a price of $25.00 per share, to raise gross proceeds of $175 million.

National Bank has also granted the underwriters an option to purchase, on the same terms, up to an additional 1 million Series 28 Preferred Shares. This option is exercisable in whole or in part by the underwriters at any time up to one business day prior to closing. The maximum gross proceeds raised under the offering will be $200 million should this option be exercised in full.

The Series 28 Preferred Shares will yield 3.80% annually, payable quarterly, as and when declared by the Board of Directors of National Bank, for the initial period ending November 15, 2017. The first of such dividends, if declared, shall be payable on February 15, 2013. Thereafter, the dividend rate will reset every five years at a level of 243 basis points over the then 5-year Government of Canada bond yield.

Holders of the Series 28 Preferred Shares will have the right to convert their shares into an equal number of non-cumulative floating rate first preferred shares Series 29 (the “Series 29 Preferred Shares”), subject to certain conditions, on November 15, 2017, and on November 15th every five years thereafter. Holders of the Series 29 Preferred Shares will be entitled to receive quarterly floating dividends, as and when declared by the Board of Directors of National Bank, equal to the 90-day Government of Canada Treasury Bill rate plus 243 basis points.

The net proceeds of the offering will be used for general corporate purposes and are expected to qualify as Tier 1 capital for National Bank. The expected closing date is on or about November 7, 2012. National Bank intends to file in Canada a prospectus supplement to its October 5, 2012 base shelf prospectus in respect of this issue.

There is nothing in the base prospectus (SEDAR, “National Bank”, October 5, Final short form prospectus – English) that speaks to the existence of a Non Viability Contingent Capital (NVCC) clause, so we shall just have to wait for the supplement.

Algonquin Power & Utilities Corp. (“APUC” in the press release) has announced:

that it will issue 4.8 million cumulative rate reset preferred shares, Series A (the “Series A Shares”) at a price of $25.00 per share, for aggregate gross proceeds of $120 million, on a bought deal basis to a syndicate of underwriters in Canada led by Scotiabank and TD Securities Inc.

The holders of the Series A Shares will be entitled to receive fixed cumulative dividends at an annual rate of $1.125 per share, payable quarterly, as and when declared by the board of directors of APUC. The Series A Shares will yield 4.5% per cent annually, for the initial six-year period ending on December 31, 2018. The first of such dividends, if declared, shall be payable on December 31, 2012, and shall be $0.1603 per Series A Share, based on the anticipated closing of the offering on November 9, 2012. The dividend rate will be reset on December 31, 2018 and every five years thereafter at a rate equal to the sum of the then five-year Government of Canada bond yield plus 2.94%. The Series A Shares are redeemable by APUC, at its option, on December 31, 2018 and on December 31st of every five years thereafter.

The holders of Series A Shares will have the option to convert all or any of their Series A Shares into Cumulative Floating Rate Preferred Shares, Series B (the “Series B Shares”) of APUC on the basis of one Series B Share for each Series A Share converted, subject to certain conditions, on December 31, 2018 and on December 31 every five years thereafter. The holders of the Series B Shares will be entitled to receive quarterly floating rate cumulative preferential cash dividends, as and when declared by the board of directors of APUC, at a rate equal to the sum of the then 90-day Government of Canada treasury bill rate plus 2.94%.

The net proceeds of the offering will be used to fund the equity portion of the acquisition of two wind farms (Minonk and Senate) in the United States and for general corporate purposes.

Chief Financial Officer, David Bronicheski commented “With the imminent conversion of our final series of convertible debentures to equity, our first series of preferred shares opens another source of capital to fund our growth and further lowers our cost of capital.”

The Series A Shares will be offered to the public in Canada by way of a short-form prospectus of APUC.

It is my understanding that this issue will be rated P-3 by S&P, Pfd-3(low) by DBRS.

Update: S&P has assigned a rating of BBB- with a positive outlook to the company:

• •We are assigning our ‘BBB-‘ long-term corporate credit rating to Algonquin Power & Utilities Corp.
• •The rating reflects our consolidated rating approach and our opinion on its two subsidiaries, Ontario-based independent power generator Algonquin Power Co. and U.S.-based regulated utility Liberty Utilities Co.
• •The positive outlook reflects our assessment of an increasing proportion of relatively stable cash flows that Liberty’s regulated utilities support.

…
The positive outlook reflects our assessment of an increasing proportion of relatively stable cash flows that Liberty’s regulated utilities support. The outlook also reflects our expectations that APUC will achieve sustained adjusted funds from operations (AFFO)-to-total debt of 15%-20%, with Liberty’s regulated cash flow supporting 40%-50% of its consolidated cash flows by 2014. We could raise the rating a notch upon the company’s meeting these expectations. Conversely, if it does not meet our expectations or its sustained AFFO-to-debt falls below 15% during our two-year outlook horizon, we would revise the outlook to stable.

The preferred rating is, as reported above, P-3.

Update, 2012-11-3:Pfd-3 low by DBRS.

Laurentian Bank has announced:

that it has entered into an agreement with a syndicate of underwriters led by RBC Dominion Securities Inc., CIBC World Markets Inc. and Laurentian Bank Securities Inc. (collectively, the “Underwriters”), under which the Underwriters have agreed to buy on a bought deal basis an aggregate of 4,000,000 Non-Cumulative Class A Preferred Shares, Series 11 (the “Preferred Shares Series 11”), at a price of $25.00 per Preferred Share Series 11 for gross proceeds of approximately $100 million (the “Offering”). The Preferred Shares Series 11 will be offered for sale to the public in each of the provinces of Canada pursuant to a prospectus supplement to Laurentian’s short form base shelf prospectus dated October 10, 2012, which supplement will be filed with Canadian securities regulatory authorities in all Canadian provinces.

Holders of Preferred Shares Series 11 will be entitled to receive non-cumulative preferential fixed quarterly dividends for the initial period ending on, but excluding, December 15, 2017, as and when declared by the board of directors of the Bank, payable in the amount of $0.25 per Preferred Share Series 11, to yield 4 per cent annually.

Thereafter, the dividend rate will reset every five years to be equal to the 5-Year Government of Canada Bond Yield plus 2.6 per cent. Subject to certain conditions, holders may elect to convert any or all of their Preferred Shares Series 11 into an equal number of Non-Cumulative Class A Preferred Shares, Series 12 (the “Preferred Shares Series 12”) on December 15, 2017 and on December 15 every five year thereafter. Holders of the Preferred Shares Series 12 will be entitled to receive non-cumulative preferential floating rate quarterly dividends, as and when declared by the board of directors of the Bank, equal to the then 3-month Government of Canada Treasury Bill yield plus 2.6 per cent.

The Offering is expected to close on or about October 18, 2012 and is subject to Laurentian receiving all necessary regulatory approvals. The net proceeds of this Offering will be used for general corporate purposes.

Great-West Lifeco Inc. has announced:

has today entered into an agreement with a syndicate of underwriters co-led by BMO Capital Markets, RBC Capital Markets and Scotiabank, under which the underwriters have agreed to buy, on a bought deal basis, 6,000,000 Non-Cumulative First Preferred Shares, Series R (the “Series R Shares”) from Lifeco for sale to the public at a price of $25.00 per Series R Share, representing aggregate gross proceeds of $150 million.

Lifeco has granted the underwriters an underwriters’ option to purchase an additional 2,000,000 Series R Shares at the same offering price. Should the underwriters’ option be fully exercised, the total gross proceeds of the Series R Shares offering will be $200 million.

The Series R Shares will yield 4.80% per annum, payable quarterly, as and when declared by the Board of Directors of the Company. The Series R Shares will not be redeemable prior to December 31, 2017. On and after December 31, 2017, the Company may, on not less than 30 nor more than 60 days’ notice, redeem the Series R Shares in whole or in part, at the Company’s option, by the payment in cash of $26.00 per Series R Share if redeemed prior to December 31, 2018, of $25.75 per Series R Share if redeemed on or after December 31, 2018 but prior to December 31, 2019, of $25.50 per Series R Share if redeemed on or after December 31, 2019 but prior to December 31, 2020, of $25.25 per Series R Share if redeemed on or after December 31, 2020 but prior to December 31, 2021 and of $25.00 per Series R Share if redeemed on or after December 31, 2021, in each case together with all declared and unpaid dividends up to but excluding the date fixed for redemption.

The Series R Share offering is expected to close on October 11, 2012. The net proceeds will be used for general corporate purposes and to augment Lifeco’s current liquidity position.

It’s very nice to see a Straight issued! It is my opinion that issuing straights is just another example of GWO’s superior management that has served it so well in the past five years. Their eyes aren’t getting big and round at the prospect of issuing a FixedReset at maybe 4.00% … instead they’re making a hard-nosed decision to lock in financing costs. FixedResets involve a certain amount of wrong-way risk for financial issuers.

This issue lacks a NVCC clause and will therefore be considered to be a DeemedRetractible, with a Deemed Maturity date of 2022-1-31. I wish OSFI would get off its duff about insurance regulation.

Brookfield Renewable Energy Partners has announced:

that it has agreed to issue a total of 8,000,000 Class A Preference Shares, Series 3 (the “Series 3 Preferred Shares”) on a bought deal basis to a syndicate of underwriters in Canada led by TD Securities Inc., CIBC, RBC Capital Markets and Scotiabank. The Series 3 Preferred Shares will be issued at a price of CDN$25.00 per share, for aggregate gross proceeds of CDN$200,000,000. The Series 3 Preferred Shares are being issued through a wholly-owned subsidiary of, and are guaranteed by, Brookfield Renewable.

Holders of the Series 3 Preferred Shares will be entitled to receive fixed cumulative dividends at an annual rate of CDN$1.10 per share, payable quarterly. The Series 3 Preferred Shares will yield 4.4% annually at the issue price, for an initial period ending July 31, 2019 with the first dividend payment date scheduled for January 31, 2013, based on an anticipated closing date of October 11, 2012. Thereafter, the dividend rate will reset every five years at a rate equal to the then five-year Government of Canada Bond yield plus 2.94%. The Series 3 Preferred Shares are redeemable on or after July 31, 2019.

The holders of Series 3 Preferred Shares will have the right to convert their shares into Class A Preference Shares, Series 4 (the “Series 4 Preferred Shares”), subject to certain conditions, on July 31, 2019 and on July 31 of every fifth year thereafter. The holders of Series 4 Preferred Shares will be entitled to receive quarterly floating rate cumulative dividends, as and when declared by the Board of Directors, at a rate equal to the then 90-day Government of Canada Treasury Bill yield plus 2.94%.

Brookfield Renewable has granted the underwriters an option, exercisable in whole or in part anytime up to two business days prior to closing, to purchase up to an additional 2,000,000 Series 3 Preferred Shares at the issue price on the same terms, for additional gross proceeds of up to CDN$50,000,000.

Brookfield Renewable intends to use the net proceeds of the issue of Preferred Shares to repay outstanding indebtedness and for general corporate purposes. The offering of Series 3 Preferred Shares is expected to close on October 11, 2012.

The Series 3 Preferred Shares will be offered to the public in Canada pursuant to a supplement to Brookfield Renewable’s existing short form base shelf prospectus dated January 23, 2012, that will be filed with securities regulatory authorities in each of the provinces and territories of Canada.

This will join BRF.PR.A, a FixedReset, 5.25%+262, currently trading slightly below $26.00.