PrefBlog

The Bank of Nova Scotia has announced:

that it intends to exercise its right to redeem all outstanding Non-cumulative Preferred Shares Series 20 of Scotiabank (the “Series 20 Shares”) and Non-cumulative Preferred Shares Series 21 of Scotiabank (the “Series 21 Shares”) on October 26, 2018, at a price equal to $25.00 per share, together with all declared and unpaid dividends. Formal notice will be issued to holders of the Series 20 Shares and Series 21 Shares in accordance with the share conditions. The redemption has been approved by the Office of the Superintendent of Financial Institutions.

On August 28, 2018, the Board of Directors of Scotiabank announced a quarterly dividend of $0.225625 per Series 20 Share, and $0.187403 per Series 21 Share. This will be the final dividend on the Series 20 Shares and Series 21 Shares, and will be paid on the date of the redemption, October 26, 2018, to shareholders of record at the close of business on October 2, 2018. After October 26, 2018, the Series 20 Shares and Series 21 Shares will cease to be entitled to dividends.

BNS.PR.Q (Series 20) was announced 2008-05-27 as a FixedReset, 5.00+170, and commenced trading 2008-6-10. After an extension announcement it reset at 3.61% in 2013.

At that time, there was a partial conversion to BNS.PR.B, the FloatingReset.

Brookfield Asset Management Inc. has announced:

that after having taken into account all election notices received by the September 17, 2018 deadline for the conversion of the Cumulative Class A Preference Shares, Series 32 (the “Series 32 Shares”) (TSX: BAM.PF.A) into Cumulative Class A Preference Shares, Series 33 (the “Series 33 Shares”), the holders of Series 32 Shares are not entitled to convert their Series 32 Shares into Series 33 Shares. There were 79,681 Series 32 Shares tendered for conversion, which is less than the one million shares required to give effect to conversions into Series 33 Shares.

It will be recalled that BAM.PF.A will reset at 5.061% effective October 1.

BAM.PF.A is a FixedReset, 4.50%+290 that commenced trading 2012-3-13 after being announced 2012-3-5. It is tracked by HIMIPref™ and assigned to the FixedResets subindex.

I recommended against conversion.

BCE Inc. has announced (on September 14):

that none of its fixed-rate Cumulative Redeemable First Preferred Shares, Series AQ (Series AQ Preferred Shares) will be converted into floating-rate Cumulative Redeemable First Preferred Shares, Series AR (Series AR Preferred Shares) on October 1, 2018.

On August 31, 2018, notice was provided that holders of Series AQ Preferred Shares could elect to convert their shares into Series AR Preferred Shares subject to the terms and conditions attached to those shares. Only 93,593 of BCE’s 9,200,000 Series AQ Preferred Shares were tendered for conversion on October 1, 2018 into Series AR Preferred Shares. As this would result in there being less than one million Series AR Preferred Shares outstanding, no Series AQ Preferred Shares will be converted on October 1, 2018 into Series AR Preferred Shares, as per the terms and conditions attached to those shares.

The Series AQ Preferred Shares will continue to be listed on the Toronto Stock Exchange under the symbol BCE.PR.Q. The Series AQ Preferred Shares will pay on a quarterly basis, for the five-year period beginning on September 30, 2018, as and when declared by the Board of Directors of BCE, a fixed quarterly cash dividend based on an annual dividend rate of 4.812%.

It will be recalled that BCE.PR.Q will reset at 4.812% effective September 30.

BCE.PR.Q is a FixedReset that came into being through an Exchange from BAF.PR.E which in turn commenced trading 2013-2-14 as a FixedReset, 4.25%+264, after being announced 2013-1-30.

I recommended against conversion.

Artis Real Estate Investment Trust has announced (on September 18):

that it has determined, based upon the election of holders of Preferred Units, Series E (“Series E Units”) (AX.PR.E), that less than 500,000 Series F Units would be issued on September 30, 2018 and consequently, no holders of Series E Units are entitled to reclassify their Series E Units to Series F Units on September 30, 2018.

Accordingly, all 4,000,000 Series E Units will remain issued and outstanding following September 30, 2018 and during the subsequent five year period commencing October 1, 2018, holders will be entitled to receive distributions, if, as and when declared by the Board of Trustees of Artis, in an annual amount per Series E Unit determined by multiplying the Annual Fixed Distribution Rate of 5.472% per annum by $25.00, payable quarterly on the last business day of each of March, June, September and December in each year during such period.

It will be recalled that AX.PR.E will reset at 5.472% effective October 1.

AX.PR.E is a FixedReset, 4.75%+330, that commenced trading 2013-3-31 after being announced 2013-3-12. It must be remembered that these are not actually preferred shares, as the term is usually used; they are preferred units and the distributions will be characterized in the same manner as distributions to the Capital units. The company publishes the characterization of the distributions on its website. Because of the company’s structure, conversion between the FixedReset and FloatingReset is probably (!) a taxable event; i.e., investors will take a capital gain or loss for tax purposes on conversion and reset the Adjusted Cost Base on their new position.

I recommended against conversion.

The Toronto-Dominion Bank has announced (on September 12):

that it will exercise its right to redeem all of its 5,481,853 outstanding Non-cumulative Class A First Preferred Shares, Series Y (the “Series Y Shares”) on October 31, 2018 at the price of $25.00 per Series Y Share, for an aggregate total of approximately $137 million.

TD also announced that it will exercise its right to redeem all of its 4,518,147 outstanding Non-cumulative Class A First Preferred Shares, Series Z (the “Series Z Shares”) on October 31, 2018 at the price of $25.00 per Series Z Share, for an aggregate total of approximately $113 million.

On August 30, 2018, TD announced that dividends of $ 0.22246875 per Series Y Share and $ 0.18293750 per Series Z Share had been declared. These will be the final dividends on the Series Y Shares and Series Z Shares, respectively, and will be paid in the usual manner on October 31, 2018 to shareholders of record on October 10, 2018, as previously announced. After October 31, 2018, the Series Y Shares and Series Z Shares will cease to be entitled to dividends and the only remaining rights of holders of such shares will be to receive payment of the redemption amount.

With the announcement of the redemption of the Series Y Shares and Series Z Shares, the right of any holder of Series Y Shares or Series Z Shares to convert such shares will cease and terminate.

Beneficial holders who are not directly the registered holder of Series Y Shares or Series Z Shares should contact the financial institution, broker or other intermediary through which they hold these shares to confirm how they will receive their redemption proceeds. Inquiries should be directed to our Registrar and Transfer Agent, AST Trust Company (Canada), at 1-800-387-0825 (or in Toronto 416-682-3860).

TD.PR.Y was announced 2008-7-7 as a FixedReset, 5.10%+168, as the seventh FixedReset issue, and an extension was announced 2013-9-26. The issue reset at 3.5595%

Roughly 45% of the issue was converted to the FloatingReset, TD.PR.Z, in 2013, and the FloatingReset traded at a tiny premium over TD.PR.Y. It had an Implied Bill Rate of 2.01% on opening day, the lowest of five FixedReset/FloatingReset pairs at the time.

Both issues have been tracked by HIMIPref™. TD.PR.Y is currently included in the FixedReset (Bank Non-NVCC) subindex, while TD.PR.Z has been relegated to Scraps on volume concerns.