PrefBlog

Manulife Financial has announced:

Manulife Asset Management Limited, the manager of Copernican International Financial Split Corp. (TSX: CIR.PR.A; CIR) (“Copernican Financial Split”), today announced that due to the number of Preferred Shares retracted under the Special Retraction Right, the board of directors has decided, as described in the management information circular dated September 27, 2013, not to proceed with the Proposal and will take the necessary steps to dissolve Copernican Financial Split. Copernican Financial Split will redeem all Class A Shares and Preferred Shares on December 2, 2013. The payment date for the final redemption will be December 12, 2013. The Preferred Shares and Class A Shares of Copernican Financial Split will be delisted from the Toronto Stock Exchange at the close of business November 28, 2013.

Holders of Preferred Shares of Copernican Financial Split will be entitled to receive a final redemption price per Preferred Share equal to the lesser of i) $10 plus any accrued and unpaid distributions thereon and ii) the net asset value (the “NAV”) of Copernican Financial Split on December 2, 2013 divided by the total number of Preferred Shares of Copernican Financial Split then outstanding. Holders of Class A Shares of Copernican Financial Split will be entitled to receive a final redemption price per Class A Share equal to the greater of i) the NAV per Unit on December 2, 2013 minus $10 and any accrued and unpaid distributions on a Preferred Share, and ii) nil. A Unit means a notional unit consisting of one Preferred Share and one Class A Share. The manager expects that the proceeds to Class A shareholders will be nil as a result of the final redemption.

According to a product summary prepared as of November 30, the NAV was $6.29 at month end.

The abortive extension of CIR.PR.A was reported on PrefBlog.

AltaGas Ltd. has announced:

it has closed its previously announced public offering of 8,000,000 Cumulative Redeemable Rate Reset Preferred Shares, Series E (the “Series E Preferred Shares”), at a price of $25.00 per Series E Preferred Share (“the Offering”) for aggregate gross proceeds of $200 million, including 2,000,000 Series E Preferred Shares pursuant to the exercise in full of an underwriters’ option.

The Offering was first announced on December 4, 2013 when AltaGas entered into an agreement with a syndicate of underwriters co-led by TD Securities Inc., RBC Capital Markets and Scotiabank.

Net proceeds will be used to reduce outstanding indebtedness and for general corporate purposes.

The Series E Preferred Shares will commence trading today on the Toronto Stock Exchange (“TSX”) under the symbol ALA.PR.E.

ALA.PR.E is a FixedReset, 5.00%+317, announced December 4. The issue will be tracked by HIMIPref™ but relegated to the Scraps index on credit concerns.

The issue traded 430,453 shares today in a range of 24.69-00 before closing at 25.00-02, 7×15.

Vital Statistics are:

Standard & Poor’s has announced:

• On Dec. 11, Fortis Inc. announced the US$4.3 billion proposed acquisition of UNS Energy Corp., an Arizona-based holding company that wholly owns Tucson Electric Power Co. (TEP).
• The cash portion proposed for the acquisition is being financed primarily with the issuance of convertible debentures which we view as debt, and the additional debt load pushes Fortis beyond our 10% adjusted funds from operations-to-debt downgrade threshold.
• As a result, we are revising our outlook on Fortis and its Canadian and Caribbean subsidiaries to negative from stable.
• At the same time, we revised our outlook on TEP to positive from stable pending the close of the acquisition.
• We are also affirming all ratings on the companies, including our ‘A-‘ long-term corporate credit rating (CCR) on Fortis and our ‘BBB’ long-term CCR on TEP.

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We expect Fortis to partially finance the cash portion through US$1.8 billion of convertible debentures with a C$239 million overallotment option. The debentures have features that encourage holders to convert, such as interest payments ceasing following closing of the acquisition. However, we treat the debentures as debt until converted. As a result, we expect adjusted funds from operations (AFFO)-to-debt to decline to below 9% until the debentures fully convert to equity. “This is below our 10% downgrade threshold for the rating,” said Standard & Poor’s credit analyst Gerry Hannochko.
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The negative outlook on Fortis reflects our expectation that credit metrics would materially weaken due to the C$1.8 billion of convertible debentures to finance the UNS acquisition. Although we expect that the debentures would have a very high likelihood of conversion, in the meantime, credit metrics would be below our thresholds. We expect to continue to assess the financial risk profile using the low volatility table. Revising the outlook to stable would likely occur when the convertible debentures are converted to equity, lessening the debt burden. If conversion of the debentures does not occur as expected and metrics remain weak, we could lower the rating one notch if the consolidated AFFO-to-total debt deteriorates below 10%.

The DBRS assessment of Review-Developing on FTS was reported on PrefBlog.

Fortis Inc. has several preferred issues trading on the Toronto Exchange: FTS.PR.E (OperatingRetractible); FTS.PR.F and FTS.PR.J (PerpetualDiscount); and FTS.PR.G, FTS.PR.H and FTS.PR.K (FixedReset).

TD Securities announced:

Big 8 Split Inc. (the “Company”) announced today the redemption prices for its 585,093 Class B Preferred Shares (“Old Class B Preferred Shares”), 651,155 Class C Preferred Shares (“Old Class C Preferred Shares”) and 1,236,248 Class A Capital Shares (“Old Capital Shares”) currently outstanding which were called for redemption on October 24, 2013 and will be redeemed in accordance with their terms on December 13, 2013.

The Old Class B Preferred Share redemption price is $12.00 per share and the Old Class C Preferred Share redemption price is $12.00 per share, both payable in cash, together with dividends thereon in the amount of $0.2100 per Class B Preferred Share, $0.1725 per Class C Preferred Share, and $0.1275 per Class A Capital Share which have been declared but remain unpaid up to but not including December 13, 2013. The Old Capital Share redemption price is $27.0359 (“Capital Share Redemption Price”) per share, payable either in cash or, if a holder has previously elected, by delivery of a pro rata share of the common shares of Bank of Montreal, The Bank of Nova Scotia, Canadian Imperial Bank of Commerce, Royal Bank of Canada, The Toronto-Dominion Bank, Great-West Lifeco Inc., Manulife Financial Corporation and Sun Life Financial Inc. (the “Portfolio Shares”) and the holder’s pro rata share of the other net assets of the Company. Payments of the redemption prices for the Old Class B Preferred Shares, Old Class C Preferred Shares and Old Capital Shares will be made by the Company on December 13, 2013.

They have also announced:

Big 8 Split Inc. (the “Company”) announced today that it has completed its treasury offering of 1,719,382 Class D Capital Shares, Series 1 (the “Capital Shares”) and 1,719,382 Class D Preferred Shares, Series 1 (the “Preferred Shares”) for aggregate gross proceeds of $38,686,095 The Capital Shares and Preferred Shares will trade on the Toronto Stock Exchange under the symbols BIG.D and BIG.PR.D, respectively.
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The Preferred Shares were offered at a price of $10.00 per share. Holders of Preferred Shares will be entitled to receive quarterly fixed cumulative preferential distributions equal to $0.1125 per Preferred Share, representing a dividend yield on the offering price of the Preferred Shares of 4.50%. The Capital Shares were offered at a price of $12.50 per share. The Capital Shares will provide holders with a leveraged investment, the value of which is linked to changes in the market price of the Portfolio Shares.

The offering was placed through a group of investment dealers co-led by TD Securities Inc., CIBC and Scotiabank, and that includes BMO Capital Markets, National Bank Financial Inc., Canaccord Genuity Corp., GMP Securities L.P., Raymond James Ltd., Desjardins Securities Inc., Mackie Research Capital Corporation and Manulife Securities Incorporated.

DBRS has assigned a provisional rating of Pfd-2(low) to BIG.PR.D:

DBRS has today finalized the provisional rating of Pfd-2 (low) to the Class D Preferred Shares, Series 1 (the Class D Preferred Shares) issued by Big 8 Split Inc. (the Company) and discontinued the ratings of the Class B Preferred Shares, Series 1 (the Class B Preferred Shares) and the Class C Preferred Shares, Series 1 (the Class C Preferred Shares), which have been fully redeemed.
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The Company has advised DBRS that the initial downside protection available to holders of the Class D Preferred Shares is expected to be approximately 52.7% after the payment of all issuance expenses (based on the minimum offering size). Dividends received on the Portfolio will be used to pay a fixed cumulative quarterly distribution to holders of the Class D Preferred Shares at a rate of 4.50% per annum while holders of the Class D Capital Shares are expected to receive all excess dividend income after the Class D Preferred Share distributions and other expenses of the Company have been paid. Based on the current dividend yield on the Portfolio, the initial Class D Preferred Share dividend coverage ratio is expected to be approximately 1.4 times.

The company’s intention to issue BIG.PR.D was reported on PrefBlog.

BIG.PR.D will not be tracked by HIMIPref™. Regrettably, it is too small an issue to provide any assurance of any liquidity at all.

Royal Bank of Canada has announced:

its intention to redeem all of its issued and outstanding Non-Cumulative 5-Year Rate Reset First Preferred Shares Series AN (the “Series AN shares”), AP (the “Series AP shares”) and AR (the “Series AR shares”) on February 24, 2014, for cash at a redemption price of $25.00 per share.

There are 9,000,000 Series AN shares outstanding, representing $225 million of capital; 11,000,000 Series AP shares outstanding, representing $275 million of capital; and 14,000,000 Series AR shares outstanding, representing $350 million of capital. The redemption of the Series AN, AP and AR shares will be financed out of the general corporate funds of Royal Bank of Canada.

Separately from the redemption price, the final quarterly dividend of $0.390625, for each of the Series AN, AP and AR shares will be paid in the usual manner on February 24, 2014 to shareholders of record on January 27, 2014.

Not bad! $850-million being redeemed all on the same day … that’s pretty close to 1.5% of the entire Canadian preferred share market! The question remains as to whether all this cash will be recycled out of the market, back into extant issues or into new issues … we will see!

Enbridge Inc. has announced:

it has closed its previously announced public offering of Cumulative Redeemable Preference shares, Series 7 (Series 7 Preferred Shares) by a syndicate of underwriters led by Scotiabank, CIBC, RBC Capital Markets, and TD Securities Inc. Enbridge issued 10 million Series 7 Preferred Shares for gross proceeds of $250 million which includes the exercise of the underwriters’ option. The Series 7 Preferred Shares will begin trading on the TSX today under the symbol ENB.PR.J. Proceeds will be used to partially fund capital projects, reduce existing indebtedness and for other general corporate purposes of the Corporation and its affiliates.

ENB.PR.J is a FixedReset, 4.40%+257, announced December 3. The issue will be tracked by HIMIPref™ and is assigned to the FixedResets subindex.

The issue traded 436,827 shares today within a range of 24.76-89, before closing at 24.80-85, 10×28.

ENB.PR.J is rated Pfd-2(low) by DBRS.

Vital statistics are:

Power Financial Corporation has announced:

the successful completion and closing of an offering of 8,000,000 4.20% Non-Cumulative 5-Year Rate Reset First Preferred Shares, Series T (the “Series T Shares”) priced at $25.00 per share to raise gross proceeds of $200 million.

The issue was bought by an underwriting syndicate co-led by BMO Capital Markets, RBC Capital Markets and Scotiabank.

The Series T Shares will be listed and posted for trading on the Toronto Stock Exchange under the symbol “PWF.PR.T”. The net proceeds from the issue will be used to supplement the Corporation’s financial resources and for general corporate purposes. The Corporation intends to redeem all of its $175 million First Preferred Shares, Series M on January 31, 2014.

PWF.PR.T is a FixedReset, 4.20%+237, announced December 2. It will be tracked by HIMIPref™ and is assigned to the FixedReset subindex.

The issue traded 728,130 shares today in a range of 25.22-35 before closing at 25.27-30, 17×96. Vital statistics are: