Category: Better Communication, Please!

Well, pig ignorance and a blithe disregard of the interests of preferred shareholders has struck again, with no announcement on the BCE Inc. preferred share information page regarding the three new series that will result from the BAF conversion.

However, a certain amount of checking permits the identification of at least two tickers:

For the first two, the correspondence of the first two columns has been established from the name information purchased from the Toronto Stock Exchange. The correspondence of the second column with the third has been established from the security descriptions contained within the Certificate of Amendment to the articles of BCE Inc., which may be found on SEDAR with the search results “BCE Inc. Sep 22 2014 16:50:17 ET Security holders documents – English PDF 847 K”.

I regret, as always, not being able to provide a link to this public document; however, bank-owned SEDAR prohibits direct links and hides them behind a secret API. This is in order to protect their monopoly. This monopoly has been granted to them by the Canadian Securities Administrators, of which the OSC is an important member. The banks are paying the OSC to help them preserve their hegemony over the Canadian financial system. So investors and the general public can stuff it.

Correspondence of the third and fourth columns was determined by looking up the description of the BAF issues in PrefLetter.

The third issue presents some problems. If we check TMX Money for BCE.PR.Q, we get the result:

Click for Big

This is the standard result for a new ticker the day before it starts trading – I assume it results from the symbol being in the database, but none of the other data that would normally be reported on this page is present. I am unable to obtain such a screen by typing in “BCE.PR.?”, where “?” is any unused letter (other than “M” and “O”, for which satisfactory assignments have been determined), or BCE.PF.A or BCE.PF.Q.

However, the name information file purchased from the Exchange refers to this as Series Q, not as Series AQ. One might at first hope that this is simply a typo, but on the other hand the “Q” series is referenced in both the long name and in the short name.

Further, a quick check of the BCE preferred share information page reveals that there actually is a BCE preferred share Series Q that is not currently trading. It is the RatchetRate counterpart to the FixedFloater BCE.PR.R, and the opportunity to convert into BCE.PR.Q was offered to the R-holders in 2010 but hardly anybody wanted them so everything stayed as R. It will be noted that Series Q was issued in 1995; holders of BCE.PR.R will get another chance to convert in 2015.

It will be noted that other information available from the Exchange – for a price! – indicates the listing date of BCE.PR.Q is 1995/11/21 … so if it weren’t for the fact that I can’t find any other ‘null response’ on TMX Money for a BCE ticker symbol, there would be no reason to suppose that there is any BAF.PR.E / BCE.PR.Q correspondence.

So basically, Series AQ, the former BAF.PR.E, may or may not trade on September 25 as BCE.PR.Q; if it does, then God only knows what Series Q will trade as if it comes into existence next year and God only knows if or when the Exchange will correct their name descriptions. If it doesn’t trade at BCE.PR.Q tomorrow, I don’t know what it will trade as.

This screw up was brought to you courtesy of the bank-owned Toronto Stock Exchange; as we all know, banks in Canada have a near monopoly position over the Canadian financial system, helped along by their special extra monopoly-enhancing payments to the regulators, and employ hundreds of thousands of people, not a single one of whom has any brains at all. Their work in this matter was done on behalf of BCE Inc., which is (surprise!) another near-monopoly which also provides employment exclusively for the brainless.

What’s up with BPO.PR.L? This issue commenced trading 2009-9-24 after being announced 2009-8-21 and is a FixedReset, 6.75%+417, with many market participants believing that it will be called at the first opportunity, 2014-9-30.

But I don’t see anything happening! According to the prospectus (emphasis added):

The Series L Shares will not be redeemable by the Corporation prior to September 30, 2014. On September 30, 2014 and on September 30 every five years thereafter (or, if such date is not a business day, the immediately following business day), and subject to certain other restrictions set out in “Description of the Series L Shares — Restrictions on Dividends and Retirement and Issue of Shares”, the Corporation may, at its option, on at least 30 days and not more than 60 days prior written notice, redeem all or from time to time any part of the outstanding Series L Shares by payment in cash of a per share sum equal to $25.00, in each case plus an amount equal to the Accrued Amount (less any tax required to be deducted and withheld by the Corporation).

OK, 30 days’ notice required. What about if they let it reset?

“Fixed Rate Calculation Date” means, for any Subsequent Fixed Rate Period, the 30th day prior to the first day of
such Subsequent Fixed Rate Period.
…
“Subsequent Fixed Rate Period” means for the initial Subsequent Fixed Rate Period, the period commencing on October 1, 2014 and ending on and including September 30, 2019 and for each succeeding Subsequent Fixed Rate Period, the period commencing on the day immediately following the end of the immediately preceding Subsequent Fixed Rate Period and ending on and including September 30 in the fifth year thereafter.
…
The Annual Fixed Dividend Rate applicable to a Subsequent Fixed Rate Period will be determined by the Corporation on the Fixed Rate Calculation Date. Such determination will, in the absence of manifest error, be final and binding upon the Corporation and upon all holders of Series L Shares. The Corporation will, on the Fixed Rate Calculation Date, give written notice of the Annual Fixed Dividend Rate for the ensuing Subsequent Fixed Rate Period to the registered holders of the then outstanding Series L Shares.

OK, 30 days’ notice required.

But, according to my calculations, there are now less than 30 days left until September 30 or October 1 (as the case may be) and there has not been a press release issued by BPO on their press release page. There was only an incidental reference in the Plan of Arrangement Proxy Circular:

Treatment of BPO Preferred Shares and BPO Senior Notes

Except for the redemption of the BPO Class A Preferred Shares and the treatment of the BPO Convertible Preferred Shares described above, there are no changes being made to the BPO Preferred Shares, which will not be affected by the Arrangement and will continue to be listed on the TSX.

In addition, as of December 31, 2013, BPO had $187 million principal amount of BPO 4.30% Notes outstanding and $140 million principal amount of BPO 4.00% Notes outstanding. The BPO Senior Notes will remain outstanding following the consummation of the Arrangement and will not be affected.

There’s no dedicated press release on the Brookfield Property Partners press release page.

Preferred shares are not mentioned in the Brookfield Property Partners earnings release.

There’s a note in the Brookfield Office Properties financial statements (available on SEDAR) that:

On August 12, 2014, the Board of Directors of the company declared dividends payable for the Class A, Class AA Series E and Class AAA Series L, N, P, R, T, V, W, X, Y and Z preferred shares.

… but nothing about a redemption. A very promising entry on SEDAR regarding “Security Holders Documents – English” dated August 27, 2014 turns out to be simply a “Restated Certificate of Incorporation”, which describes Series L in loving detail, but makes no mention of an actual call for redemption.

I have sent the following eMail to the official investor inquiries guy:

Dear Mr. Cherry,

It is my understanding that the captioned series of shares is due to either reset or be redeemed on September 30, 2014, but that in either case notices will be made regarding the disposition of these shares thirty days prior to the applicable date.

I have been unable to find any such notices on your website.

Can you please tell me whether the captioned series will be redeemed or reset?

Sincerely,

So we shall see what we shall see! Implied Volatility theory suggests that there will be a very nice jump in price should the BPO.PR.L shares be reset:

Click for Big

The useless pack of morons in charge of Partners Value Split Corp. have announced:

That’s right – nothing. The dolts calling themselves directors are:

• John P. Barratt
• Brian D. Lawson
• James L.R. Kelly
• Frank N.C. Lochan *
• Edward C. Kress *
• Allen G. Taylor *

The twerps marked with an asterisk are also boneheaded officers of the corporation, joined by the lackadaisical Loretta M. Corso.

None of these idiots ensured that there was anything at all on the company website to indicate a change of ticker. My Lord, but these cretins are lucky that running a single-share Split Corp. doesn’t take any brains.

It was left to Stockwatch to publish the only internet mention I have found of today’s ticker change:

Partners Value Split Corp. has changed its trading symbol to PVS from BNA, according to the Toronto Stock Exchange. The exchange reports the company’s preferred shares will start trading under the new symbol at the open on Friday, July 18, 2014. There will be no change to the Cusip numbers. The company’s Series 1 preferred shares will trade under the symbol PVS.PR.A, its Series 3 preferred shares will trade under PVS.PR.B, its Series 5 preferred shares will trade under PVS.PR.C and its Series 6 preferred shares will trade under PVS.PR.D.

This allows us to construct the following table, which I have checked from data available from the Toronto Stock Exchange, once you know what to look for and pay:

Update, 2014-7-21: They have issued a press release!

Toronto, July 21, 2014: Partners Value Split Corp. (the “Company”) announced today that the Company has changed the ticker symbol of its preferred shares trading on the TSX from BNA to PVS, effective Friday, July 18, 2014. The Company’s ticker symbol is now aligned with its corporate name.

The following table shows the former ticker symbol and new ticker symbol for each series of the Company’s outstanding preferred shares:

Preferred Share	Former Ticker Symbol	New Ticker Symbol
Series 1	BNA.PR.B	PVS.PR.A
Series 3	BNA.PR.C	PVS.PR.B
Series 5	BNA.PR.E	PVS.PR.C
Series 6	BNA.PR.F	PVS.PR.D

The Company owns a portfolio consisting of 53,160,644 Class A Limited Voting Shares of Brookfield Asset Management Inc. (the “Brookfield Shares”) which is expected to yield quarterly dividends that are sufficient to fund quarterly fixed cumulative preferential dividends for the holders of the Company’s preferred shares and to enable the holders of the Company’s capital shares to participate in any capital appreciation of the Brookfield Shares. Brookfield Asset Management is a global alternative asset manager with over US$175 billion in assets under management. For more than 100 years, Brookfield has owned and operated assets on behalf of shareholders and clients with a focus on property, renewable energy, infrastructure and private equity. Brookfield has a range of public and private investment products and services which leverage its expertise and experience. The Brookfield Shares are co-listed on the New York Stock Exchange under the symbol “BAM”, the TSX under the symbol “BAM.A” and the NYSE Euronext under the symbol “BAMA”.

* * * *

For further information, please contact: Allen G. Taylor, Chief Financial Officer, at (416) 359-7864

It will be recalled that LFE.PR.A is undergoing a reorganization; a very important part of this reorganization was:

Shareholders who do not wish to remain invested in the Company under its reorganized share structure will have until the close of business on May 17, 2012 to provide the Company with notice through their CDS participant that they wish to have their Preferred Shares or Class A Shares redeemed pursuant to the 2012 Special Retraction Right, and to surrender their Shares for retraction. On such a special retraction, each holder of a Preferred Share will receive the lesser of (i) $10.00 and (ii) the net asset value per Unit calculated on May 31, 2012; while holder of a Class A Share will receive the net asset value per Unit calculated on May 31, 2012, less $10.00. Shareholders interested in exercising such retraction right should contact the CDS Participant through which they hold the Shares for further information and instructions as to how to exercise this right. Shareholders should note that the requirements of any particular CDS Participant may vary, and that Shareholders may need to inform their CDS Participant of any intention to exercise this retraction right in advance of the May 17 deadline. Payment for the Class A Shares or Preferred Shares so tendered for retraction pursuant to the 2012 Special Retraction Right will be made no later than June 19, 2012.

So – the company has known what the consolidation ratio was going to be for which issue (either the capital units or the preferreds) since … oh, call it the morning of May 18. In my innocence, I had assumed that the details of the consolidation would be made available on the NAV date of May 31 (or June 1, anyway!):

If more Class A Shares are tendered for retraction under the 2012 Special Retraction Right than Preferred Shares, the outstanding Preferred Shares will be consolidated so that following the retraction pursuant to the 2012 Special Retraction Right there would be an equal number of Preferred Shares and Class A Shares outstanding. Similarly, if more Preferred Shares are tendered for retraction than Class A Shares, the outstanding Class A shares will be consolidated so that again there would be an equal number of Preferred Shares and Class A Shares outstanding following implementation of the 2012 Special Retraction Right. The Company may implement this consolidation by adjusting the number of 2012 Preferred Shares, 2013 Warrants and 2014 Warrants to be issued to holders of Preferred Shares, in the event a consolidation of Preferred Shares is required.

No announcement has yet been made, so I inquired; the answer received was:

A news release will likely be disseminated close to the June 19th Special Retraction payment date.

Knowing the consolidation ratio is critical when evaluating credit quality of LFE.PR.A; it is also critical when evaluating the option value of LFE. But good old Quadravest is going to keep us in the dark; and I cannot even begin to fathom the purpose behind the delay.

All I can suggest is that according to the 2011 Financials, there were 10,712,753 units outstanding on 2011-11-30 and this number is reflected for each part of the unit on the TMX Money Website. Another possibility is to check SEDAR for filings that are only semi-publicized.

What a total waste of time.

The essence of the redemption noted by Assiduous Reader erikd has been confirmed:

STW.PR.A has been called at $10.2 + accrued for total of $10.3173913 per share. 33.8575% of preferred shares have been called. This is a good premium to last friday’s trading price.
…
source is bloomberg, under news of the capital shares
I grabbed the screen at work. It will trade ex-redemption on Dec 9th, and supposed to get redeemed on Dec 12th.

I have confirmed with investor relations at Middlefield that the size is at least approximately correct; the redemption price per the prospectus is indeed 10.20.

The closing quote on Dec 8 – the last cum-redemption day, according to erikd, and the day he posted his note – was 9.11-18, on volume of 9227 shares. Yesterday was 8.64-87 on 5,294 shares. Today was 8.80-26, 13×2 on no volume.

I don’t know when the information was posted on Bloomberg, but if I had sold shares prior to the ex-redemption date and after the posting, I’d be pretty upset. According to me, a sizable redemption at a premium of more than 10% to market price counts as material information. Nothing was on their website, and investor relations could not confirm or deny immediately.

Their investor relations representative emphasized that they were not in breach of regulatory requirements. That may well be the case (it is not my place to judge) but I will suggest that:

• The redemption was material information.
• Bloomberg is a paid service; advising Bloomberge does not (or should not) constitute public disclosure
• Therefore – whatever the strict legalities might be – I consider this a case of selective disclosure
• If Middlefield did indeed follow minimum regulatory standards, that’s not good enough. They should have more consideration for their investors’ interests than that.
• Let’s see a press release next time!

I will also be most interested to learn whether Middlefield purchased preferred according to the issuer bid. I will suggest that, given that STW.PR.A has not closed above 9.60 in at least a month, it would have been in the best interests of the fund to have exercised this right to the maximum extent possible.

I have noted a previous STW.PR.A stealth redemption.

STW.PR.A is tracked by HIMIPref™ and is part of the InterestBearing subindex. Given the low asset coverage ratio, it will probably be downgraded at some point in the near future at which point it will be relegated to “Scraps”. It is also possible that reduced liquidity due to the reduced float will be a prior cause for relegation.