PrefBlog

– ECN Capital Corp. has announced:

that it does not intend to exercise its right to redeem all or any part of the currently outstanding Cumulative 5-Year Minimum Rate Reset Preferred Shares, Series C (the “Series C Shares”) (TSX: ECN.PR.C) on June 30, 2022 (the “Conversion Date”).

As a result and subject to certain conditions set out in the terms of the Series C Shares as set out in the Company’s articles and summarized in the prospectus supplement of the Company dated May 17, 2017 relating to the issuance of the Series C Shares, the holders of the Series C Shares will have the right to convert all or any of their Series C Shares into Cumulative Floating Rate Preferred Shares, Series D of the Company (the “Series D Shares”) on the basis of one Series D Share for each Series C Share on the Conversion Date.

With respect to any Series C Shares that remain outstanding after the Conversion Date, 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 annual dividend rate for the Series C Shares for the five-year period from and including June 30, 2022 to but excluding June 30, 2027 will be 7.93700%, being equal to the five-year Government of Canada bond yield of 2.74700% determined as of May 31, 2022 plus 5.19000%, determined in accordance with the terms of the Series C Shares.

With respect to any Series D Shares that may be issued on the Conversion Date, holders thereof will be entitled to receive quarterly floating rate cumulative preferential cash dividends, if, as and when declared by the Board of Directors of the Company. The dividend rate applicable to the Series D Shares for the three-month period from and including June 30, 2022 to but excluding September 30, 2022 will be 6.66700%, being equal to the annual rate for the most recent auction as of May 31, 2022 of three-month Government of Canada Treasury Bills of 1.47700% plus 5.19000%, determined in accordance with the terms of the Series D Shares (the “Floating Quarterly Dividend Rate”). The Floating Quarterly Dividend Rate will be reset every quarter.

As provided in the terms of the Series C Shares, if ECN determines after reviewing all Series C Shares tendered for conversion into Series D Shares that: (i) there would remain outstanding on the Conversion Date less than 500,000 Series C Shares, all remaining Series C Shares shall be converted automatically into Series D Shares on a one-for one basis effective on the Conversion Date; or (ii) there would remain outstanding on the Conversion Date less than 500,000 Series D Shares, the holders of Series C Shares shall not be entitled to convert their shares into Series D Shares on the Conversion Date. There are currently 3,712,400 Series C Shares outstanding.

The Series C Shares are issued in “book entry only” form and must be purchased or transferred through a participant in the CDS depository service (“CDS Participant”). All rights of holders of Series C Shares must be exercised through CDS or the CDS Participant through which the Series C Shares are held. The deadline for the registered shareholder to provide notice of exercise of the right to convert Series C Shares into Series D Shares is 5:00 p.m. (Toronto time) on June 17, 2022. Any notices received after this deadline will not be valid. As such, holders of Series C Shares who wish to exercise their right to convert their shares should contact their broker or other intermediary for more information and it is recommended that this be done well in advance of the deadline in order to provide the broker or other intermediary with time to complete the necessary steps.

If ECN does not receive an election notice from a holder of Series C Shares during the time fixed therefor, then the Series C Shares shall be deemed not to have been converted (except in the case of an automatic conversion). Holders of the Series C Shares and the Series D Shares will have the opportunity to convert their shares again on June 30, 2027, and every five years thereafter as long as the shares remain outstanding.

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

ECN.PR.C was issued as a FixedReset, 6.25%+519M625, that commenced trading 2017-5-25 after being announced 2017-5-15. It is tracked by HIMIPref™ but relegated to the Scraps subindex on credit concerns.

Thanks to Assiduous Reader CanSiamCyp for ensuring I was aware of this!

As mentioned in the June 1 Market Action Report, I recently was forwarded a copy about a complaint regarding the dividend amount for BCE.PR.B:

Assiduous Reader TS sends me a copy of an eMail he sent to BCE:

Dear Sir or Madame,

I believe that the dividend on BCE.PR.B and similar prime rate preferred shares for record date May 31, 2022 were calculated incorrectly.

On the website it states that the dividend is $0.06215

The prime rate for the entire month of May was 3.2% so $25 x 3.2% / 12 mths = $0.06667

You still have time to change that as payment date is Jun 13, 2022.

Please correct as soon as possible.

Thank you.

Today, the dividend page for BCE.PR.B has been revised to show a dividend payable June 13 for 0.06667 and I was forwarded a copy of BCE’s response:

Good morning!

Indeed, you are correct and we had caught it just in time to have it corrected with the various instances when you wrote to us.

Really appreciate you taking the time to let us know.

Sincerely,

Well done, TS! It always pays to check things and pays even better to make polite inquiries when something seems strange!

Brookfield Asset Management Inc. has announced:

that it has determined the fixed dividend rate on its Cumulative Class A Preference Shares, Series 28 (“Series 28 Shares”) (TSX: BAM.PR.X) for the five years commencing July 1, 2022 and ending June 30, 2027.

If declared, the fixed quarterly dividends on the Series 28 Shares during the five years commencing July 1, 2022 will be paid at an annual rate of 4.606% ($0.287875 per share per quarter).

Holders of Series 28 Shares have the right, at their option, exercisable not later than 5:00 p.m. (Toronto time) on June 15, 2022, to convert all or part of their Series 28 Shares, on a one-for-one basis, into Cumulative Class A Preference Shares, Series 29 (the “Series 29 Shares”), effective June 30, 2022. The quarterly floating rate dividends on the Series 29 Shares will be paid at an annual rate, calculated for each quarter, of 1.80% over the annual yield on the three-month Government of Canada treasury bills. The actual quarterly dividend rate in respect of the July 1, 2022 to September 30, 2022 dividend period for the Series 29 Shares will be 0.82598% (3.277% on an annualized basis) and the dividend, if declared, for such dividend period will be $0.2065 per share, payable on September 30, 2022.

Holders of Series 28 Shares are not required to elect to convert all or any part of their Series 28 Shares into Series 29 Shares.

As provided in the share conditions of the Series 28 Shares, (i) if Brookfield determines that there would be fewer than 1,000,000 Series 28 Shares outstanding after June 30, 2022, all remaining Series 28 Shares will be automatically converted into Series 29 Shares on a one-for-one basis effective June 30, 2022; and (ii) if Brookfield determines that there would be fewer than 1,000,000 Series 29 Shares outstanding after June 30, 2022, no Series 28 Shares will be permitted to be converted into Series 29 Shares. There are currently 9,233,927 Series 28 Shares outstanding.

The Toronto Stock Exchange (“TSX”) has conditionally approved the listing of the Series 29 Shares effective upon conversion. Listing of the Series 29 Shares is subject to Brookfield fulfilling all the listing requirements of the TSX.

BAM.PR.X was issued as a FixedReset, 4.60%+180, that commenced trading 2011-2-8 after being announced 2011-1-19. It reset at 2.727% in 2017. I recommended against conversion and there was no conversion.It is included in the FixedReset (Discount) subindex.

Thanks to Assiduous Reader CanSiamCyp for ensuring I was aware of this!