PrefBlog

Quadravest has announced:

Dividend 15 Split Corp. (the “Company”) is pleased to announce it will undertake an offering of Preferred Shares and Class A Shares of the Company.

The offering will be co-led by National Bank Financial Inc., CIBC World Markets Inc., Scotia Capital Inc. and RBC Capital Markets, and will also include TD Securities Inc., BMO Capital Markets, Canaccord Genuity Corp., Industrial Alliance Securities Inc., Echelon Wealth Partners, GMP Securities L.P., Raymond James Ltd., Desjardins Securities Inc., Mackie Research Capital Corporation, and Manulife Securities Incorporated.

The Preferred Shares will be offered at a price of $10.00 per Preferred Share to yield 5.25% and the Class A Shares will be offered at a price of $8.75 per Class A Share to yield 13.71%. The closing price on the TSX of each of the Preferred Shares and the Class A Shares on October 22, 2019 was $10.34 and $8.91, respectively.

Since inception of the Company, 186 consecutive dividends have been paid to both classes of shares. The aggregate dividends paid on the Preferred Shares have been $8.16 per share and the aggregate dividends paid on the Class A Shares have been $22.10 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), for a combined total of $30.26 per unit. All distributions to date have been made in tax advantage eligible Canadian dividends or capital gains dividends. The net proceeds of the offering will be used by the Company to invest in an actively managed, high quality portfolio consisting of 15 dividend yielding Canadian companies as follows:

Bank of Montreal	Enbridge Inc.	TELUS Corporation
The Bank of Nova Scotia	Manulife Financial Corp.	Thomson-Reuters Corporation Inc.
BCE Inc.	National Bank of Canada	The Toronto-Dominion Bank
Canadian Imperial Bank of Commerce	Royal Bank of Canada	TransAlta Corporation
CI Financial Corp.	Sun Life Financial Inc.	TC Energy

The Company’s investment objectives are:
Preferred Shares:
i. to provide holders of the Preferred Shares with fixed, cumulative preferential monthly cash dividends in the amount of 5.25% annually (5.50% effective December 1, 2019); and
ii. on or about the termination date, currently December 1, 2024 (subject to further 5 year extensions thereafter and it has been extended in the past), to pay the holders of the Preferred Shares $10.00 per Preferred Share.

Class A Shares:
i. to provide holders of the Class A Shares with regular monthly cash dividends currently targeted to be $0.10 per share; and
ii. on or about the termination date, currently December 1, 2024 (subject to further 5 year extensions thereafter and it has been extended in the past) to pay holders of Class A Shares at least the original issue price of those shares.

The sales period of this overnight offering will end at 9:00 a.m. EST on October 24, 2019. The offering is expected to close on or about October 31, 2019 and is subject to certain closing conditions including approval by the TSX.

So Whole Units are being offered for $10 + $8.75 = $18.75 and the NAVPU as of October 15 was 17.76, for a premium of 5.6%. What a great business this is!

DFN.PR.A was first traded 2004-3-16 as a 5.25% Split Share scheduled to mature 2009-12-1. A Special Resolution was proposed in April 2007 to extend term to 2014-12-1 with an unchanged dividend. The proposal was approved and shareholders had a wild ride during the Credit Crunch. There was another term extension approved in June 2013 with the dividend remaining unchanged. The fund then swallowed up CGQ & CGQ.E as well as STQ / STQ.E. The extension to 2024 was announced in February, 2019 and the dividend rate for the extension is 5.50%.

Update, 2019-10-26: They did well:

Dividend 15 Split Corp. (the “Company”) is pleased to announce it has completed the overnight marketing of up to 3,627,000 Preferred Shares and up to 3,627,000 Class A Shares of the Company. Total proceeds of the offering are expected to be approximately $68,006,250.

TC Energy Corporation has announced:

that 173,386 of its 18,000,000 fixed rate Cumulative Redeemable First Preferred Shares, Series 9 (Series 9 Shares) were deposited for conversion on October 30, 2019 on a one-for-one basis into floating rate Cumulative Redeemable First Preferred Shares, Series 10 (Series 10 Shares).

As previously announced in our news release dated September 18, 2019, the conversions are subject to the conditions that: (i) if TC Energy determines that there would be less than one million Series 9 Shares outstanding after October 30, 2019, then all remaining Series 9 Shares will automatically be converted into Series 10 Shares on a one-for-one basis on October 30, 2019 and (ii) alternatively, if TC Energy determines that there would be less than one million Series 10 Shares outstanding after October 30, 2019, no Series 9 Shares will be converted into Series 10 Shares.

As the total number of Series 9 Shares deposited for conversion did not meet the threshold set out above, no Series 9 Shares will be converted into Series 10 Shares on October 30, 2019.

For more information on the terms of and risks associated with an investment in the Series 9 Shares and the Series 10 Shares, please see our prospectus supplement dated January 13, 2014 which is available on sedar.com or on our website.

It will be recalled that TRP.PR.E will reset at 3.762% effective October 30, 2019

TRP.PR.E is a FixedReset, 4.25%+235, that commenced trading 2014-1-20 after being announced 2014-1-13. Notice of extension was provided on 2019-9-18. TRP.PR.E will reset at 3.762% effective October 30, 2019. I recommended against conversion. The issue is tracked by HIMIPref™ and assigned to the FixedReset-Discount subindex.

The Toronto-Dominion Bank has announced:

that none of its 20 million Non-Cumulative 5-Year Rate Reset Preferred Shares, Series 1 (Non-Viability Contingent Capital (NVCC)) (the “Series 1 Shares”) will be converted on October 31, 2019 into Non-Cumulative Floating Rate Preferred Shares, Series 2 (NVCC) (the “Series 2 Shares”) of TD.

During the conversion period, which ran from October 1, 2019 to October 16, 2019, 230,894 Series 1 Shares were tendered for conversion into Series 2 Shares, which is less than the minimum 1,000,000 shares required to give effect to the conversion, as described in the prospectus supplement for the Series 1 Shares dated May 28, 2014. As a result, no Series 2 Shares will be issued on October 31, 2019 and holders of Series 1 Shares will retain their Series 1 Shares.

The Series 1 Shares are currently listed on the Toronto Stock Exchange under the symbol TD.PF.A. As previously announced on October 1, 2019, the dividend rate for the Series 1 Shares for the 5-year period from and including October 31, 2019 to but excluding October 31, 2024 will be 3.662%

TD.PF.A is a FixedReset, 3.90%+224, NVCC-compliant issue that commenced trading 2014-6-4 after being announced 2014-5-26. TD.PF.A will reset at 3.662% effective October 31, 2019. I recommended against conversion. It is tracked by HIMIPref™ and is assigned to the FixedReset – Discount subindex.

DBRS has announced that it:

upgraded Sun Life Financial Inc.’s (SLF or the Company) Issuer Rating and Senior Unsecured Debentures rating to A (high) from “A,” its Subordinated Unsecured Debentures rating to “A” from A (low) and its Preferred Shares rating to Pfd-2 (high) from Pfd-2.
…
The ratings upgrade recognizes the Company’s improved franchise strength, the increasing diversification of earnings across its four core business segments and its excellent capitalization. Furthermore, DBRS Morningstar has gained comfort from management’s actions over the past year to turn around the performance of SLF’s legacy U.S. individual life block that is in run-off, including the reserve strengthening, which should reduce the probability of the block adversely impacting results. The ratings also consider the Company’s exposure to operational risk arising from operating in multiple jurisdictions with varying degrees of geopolitical risk in Asia, as well as its guaranteed products in Canada that can result in profit volatility. Also a ratings constraint is SLF’s higher proportion of mortgages, BBB-rated bonds and corporate loans in the Company’s investment portfolio relative to those of similarly rated peers.
…
SLF and its main operating insurance subsidiary, SLA, are maintaining strong regulatory capital ratios. Indeed, with sizable cushions over regulatory minimums under the Life Insurance Capital Adequacy Test (LICAT) framework that was implemented in 2018, DBRS Morningstar views the Company as very well positioned to navigate adverse scenarios. As of Q2 2019, the LICAT for the consolidated holding company was 144%, higher than SLA’s LICAT of 133%, as the holding company held $2.2 billion of additional assets comprising cash and other liquid assets. Solid earnings in the last five years have also contributed to the Company’s strong capitalization level. Moreover, financial leverage remains conservative at 20.4% with a fixed-charge coverage ratio of 9.0 times as of Q2 2019.

Affected issues are: SLF.PR.A, SLF.PR.B, SLF.PR.C, SLF.PR.D, SLF.PR.E, SLF.PR.G, SLF.PR.H, SLF.PR.I, SLF.PR.J and SLF.PR.K.