PrefBlog

Scotia Managed Companies has announced:

The Board of Directors of BNS Split Corp. II (the “Company”) has declared today dividends of $0.1971 per Preferred Share and $0.2150 per Capital Share, payable on September 22, 2020 to holders of record at the close of business on September 18, 2020.

The Class A Capital Shares (“Capital Shares”) and Class B Preferred Shares, Series 2 (“Preferred Shares”) will be redeemed by the Company in accordance with their terms on September 22, 2020 and the Company will wind up and terminate as soon as practicable after such date. The redemption price for each Preferred Share will be an amount equal to the Series 2 Preferred Share Redemption Price (as defined in the provisions attaching to the Preferred Shares). The Series 2 Preferred Share Redemption Price will equal the lesser of (i) $19.71; and (ii) Unit Value (as defined in the provisions attaching to the Preferred Shares). The redemption price (the “Capital Share Redemption Price”) for every two Capital Shares redeemed will be an amount equal to the amount, if any, by which the Unit Value exceeds $19.71.

Holders of Capital Shares who requested to receive a redemption payment equal to the Capital Share Redemption Price in common shares of The Bank of Nova Scotia (“BNS”) (rounded down to the nearest whole share) rather than cash and gave notice to this effect and tendered $19.71 for every two Capital Shares by August 24, 2020 will receive their pro rata share of BNS shares. The redemption of Capital Shares and Preferred Shares will constitute a taxable disposition of the Company’s shares at the time of the redemption whether the payment is received in the form of cash or BNS shares.

A further press release will be issued by the Company in connection with the redemption prices on September 21, 2020. Payment of the amounts due to holders of Capital Shares and Preferred Shares will be made by the Company on September 22, 2020.

BNS Split Corp. II is a mutual fund corporation created to hold a portfolio of common shares of The Bank of Nova Scotia. Capital Shares and Preferred Shares of BNS Split Corp. II are listed for trading on The Toronto Stock Exchange under the symbols BSC and BSC.PR.C respectively.

The issue commenced trading 2015-9-22 after being announced 2015-9-17. The issue is tracked by HIMIPref™ but is relegated to the Scraps subindex on volume concerns.

Fairfax Financial Holdings Limited has announced:

that it has determined the fixed dividend rate on its Cumulative 5-Year Rate Reset Preferred Shares, Series G (the “Series G Shares”) (TSX: FFH.PR.G) for the five years commencing October 1, 2020 and ending September 30, 2025. The fixed quarterly dividends on the Series G Shares during that period, if and when declared, will be paid at an annual rate of 2.962% (C$0.185125 per share per quarter).

Holders of Series G Shares have the right, at their option, exercisable not later than 5:00 p.m. (Toronto time) on September 15, 2020, to convert all or part of their Series G Shares, on a one-for-one basis, into Cumulative Floating Rate Preferred Shares, Series H (the “Series H Shares”) (TSX: FFH.PR.H), effective September 30, 2020. The quarterly floating rate dividends on the Series H Shares will be paid at an annual rate, calculated for each quarter, of 2.56% over the annual yield on three-month Government of Canada treasury bills. The actual quarterly dividend rate in respect of the September 30, 2020 to December 30, 2020 dividend period for the Series H Shares will be 0.68282% (2.70900% on an annualized basis) and the dividend for such dividend period, if and when declared, will be C$0.17070 per share, payable on December 30, 2020.

Holders of Series H Shares also have the right, at their option, exercisable not later than 5:00 p.m. (Toronto time) on September 15, 2020, to convert all or part of their Series H Shares, on a one-for-one basis, into Series G Shares, effective September 30, 2020. Holders of the Series H Shares who elect to convert their shares by the conversion deadline will receive Series G Shares effective September 30, 2020 and will be entitled to receive, if and when declared, the fixed-rate dividend as described above.

Holders of Series G Shares are not required to elect to convert all or any part of their Series G Shares into Series H Shares and holders of Series H Shares are not required to elect to convert all or any part of their Series H Shares into Series G Shares. Holders of the Series G Shares who do not elect to convert their shares by the conversion deadline will retain their Series G Shares and will receive the fixed-rate dividend as described above (subject to the automatic conversion features described below). Holders of the Series H Shares who do not elect to convert their shares by the conversion deadline will retain their Series H Shares and will receive the floating-rate dividend as described above (subject to the automatic conversion features described below).

As provided in the share conditions of the Series G Shares and the Series H Shares: (i) if Fairfax determines that there would be fewer than 1,000,000 Series G Shares outstanding after September 30, 2020, all remaining Series G Shares will be automatically converted into Series H Shares on a one-for-one basis effective September 30, 2020 and Fairfax will cause the return of all Series H Shares tendered for conversion into Series G Shares; and (ii) if Fairfax determines that there would be fewer than 1,000,000 Series H Shares outstanding after September 30, 2020, all remaining Series H Shares will be automatically converted into Series G Shares on a one-for-one basis effective September 30, 2020 and Fairfax will cause the return of all Series G Shares tendered for conversion into Series H Shares.

There are currently 7,432,952 Series G Shares and 2,567,048 Series H Shares outstanding. The Series G Shares and the Series H Shares are listed on the Toronto Stock Exchange under the trading symbols “FFH.PR.G” and “FFH.PR.H”, respectively.

FFH.PR.G was issued as a FixedReset 5.00%+256, which commenced trading July 28, 2010 after being announced July 20, 2010. It reset to 3.318% in 2015. I recommended that holders continue holding the issue, but there was a 26% conversion anyway.

FFH.PR.H is a FloatingReset, Bills+256, that arose out of a partial conversion from FFH.PR.G.

Northland Power Inc. has announced:

that pursuant to the share terms in respect of the Cumulative Rate Reset Preferred Shares, Series 1 (“Series 1 Shares”), it has determined the fixed dividend rate for the five years commencing September 30, 2020 and ending September 29, 2025. The fixed quarterly dividends on the Series 1 Shares during that period will be paid at an annual rate of 3.2% (Cdn. $0.2001 per share per quarter).

The quarterly floating rate dividends on the Cumulative Floating Rate Preferred Shares, Series 2 (the “Series 2 Shares”) will be paid at an annual rate, calculated for each quarter, of 2.80% over the annual yield on 90-day Government of Canada treasury bills. The actual quarterly dividend rate in respect of the September 30, 2020 to December 30, 2020 dividend period for the Series 2 Shares will be 0.74% (2.95% on an annualized basis) and the dividend, if and when declared, for such dividend period will be Cdn. $0.1859 per share, payable on December 31, 2020.

Holders of Series 1 Shares and Series 2 Shares have the right, at their option, exercisable not later than 5:00 pm (Toronto time) on September 15, 2020, to convert all or part of their Series 1 Shares or Series 2 Shares, as applicable, on a one-for-one basis, into shares of the other series, effective September 30, 2020.

Holders of either Series 1 Shares or Series 2 Shares are not required to elect to convert all or any part of their shares.

As provided in the share conditions for each of the Series 1 Shares and the Series 2 Shares, if Northland determines that after giving effect to all notices of conversion of Series 1 Shares and Series 2 Shares there would be fewer than 1,000,000 Series 1 Shares or Series 2 Shares outstanding after September 30, 2020, (i) all remaining shares of the series for which there would be fewer than 1,000,000 shares outstanding will be automatically converted into the other series of preferred shares on a one-for-one basis effective September 30, 2020; and (ii) no shares will be permitted to be converted into the series that would have fewer than 1,000,000 shares outstanding.

There are currently 4,501,565 Series 1 Shares and 1,498,435 Series 2 Shares outstanding.

NPI.PR.A was issued as a FixedReset, 5.25%+280bp, which commenced trading 2010-7-28 after being announced 2010-7-6 under the ticker symbol NPP.PR.A. The ticker was changed to NPI.PR.A effective January 1, 2011 after conversion from an Income Trust. The issue reset to 3.51% in 2015 and I recommended that holders retain the issue but there was a 25% conversion to NPI.PR.B.

NPI.PR.B is a FloatingReset, Bills+280bp, which came into existence via a partial conversion from NPI.PR.A.

AltaGas Ltd. has announced:

that it does not intend to exercise its right to redeem any or all of its currently outstanding Cumulative Redeemable Five-Year Rate Reset Preferred Shares, Series A (the “Series A Shares”) (TSX: ALA.PR.A) or the Cumulative Redeemable Floating Rate Preferred Shares, Series B (the “Series B Shares”) (TSX: ALA.PR.B) on September 30, 2020 (the “Conversion Date”).

As a result, subject to certain conditions, the holders of the Series A Shares have the right to convert all or part of their Series A Shares on a one-for-one basis into Series B Shares on the Conversion Date. Holders who do not exercise their right to convert their Series A Shares into Series B Shares will, subject to automatic conversion in the circumstances described below, retain their Series A Shares.

In addition, on the Conversion Date the holders of the Series B Shares have the right to convert all or part of their Series B Shares on a one-for-one basis into Series A Shares. Holders who do not exercise their right to convert their Series B Shares into Series A Shares will, subject to automatic conversion in the circumstances described below, retain their Series B Shares.

The foregoing conversion rights are subject to the conditions that: (i) if AltaGas determines that after giving effect to all conversions there would be less than 1,000,000 Series A Shares outstanding after the Conversion Date, then all remaining Series A Shares will automatically be converted into Series B Shares on a one-for-one basis on the Conversion Date; and (ii) if AltaGas determines that after giving effect to all conversions there would be less than 1,000,000 Series B Shares outstanding after the Conversion Date, then all remaining Series B Shares will automatically be converted into Series A Shares on a one-for-one basis on the Conversion Date. There are currently 5,511,220 Series A Shares and 2,488,780 Series B Shares outstanding.

With respect to any Series A Shares that are outstanding after the Conversion Date, holders shall be entitled to receive, as and when declared by the Board of Directors of AltaGas, fixed cumulative preferential cash dividends, payable quarterly. The new annual dividend rate applicable to the Series A Shares for the five-year period commencing on and including September 30, 2020 to, but excluding, September 30, 2025 will be 3.060 percent, being equal to the sum of the five-year Government of Canada bond yield determined as of today plus 2.66 percent.

With respect to any Series B Shares that are outstanding after the Conversion Date, holders shall be entitled to receive, as and when declared by the Board of Directors of AltaGas, quarterly floating rate cumulative preferential cash dividends. The dividend rate applicable to the Series B Shares for the three-month floating rate period commencing on and including September 30, 2020 to, but excluding, December 31, 2020 will be 2.809 percent, being equal to the sum of the annual rate of interest for the most recent auction of 90 day Government of Canada treasury bills plus 2.66 percent (the “Floating Quarterly Dividend Rate”). The Floating Quarterly Dividend Rate will be reset every quarter.

Beneficial holders of Series A Shares and Series B Shares who wish to exercise their right of conversion should instruct their broker or other nominee to exercise such right during the conversion period, which runs from August 31, 2020 until 5:00 p.m. (Toronto time) on September 15, 2020. 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. Any notices received after this deadline will not be valid.

Subject to the terms and conditions of the Series A Shares and Series B Shares and AltaGas’ right to redeem such shares, holders of the Series A Shares and the Series B Shares will have the opportunity to convert their shares again on September 30, 2025, and every five years thereafter as long as the Series A Shares and Series B Shares remain outstanding.

ALA.PR.A is a FixedReset issued at 5.00%+266bp, which commenced trading August 19, 2010 after being announced August 10, 2010. In 2015 the issue reset to 3.38% and I recommended holders retain the issue. Despite this, there was a 31% conversion to FloatingResets.

ALA.PR.B is a FloatingReset, Bills+266bp, which arose via a partial conversion from ALA.PR.A in 2015.