PrefBlog

Brookfield Corporation has announced:

that it has determined the fixed dividend rate on its Cumulative Class A Preference Shares, Series 32 (“Series 32 Shares”) (TSX: BN.PF.A) for the five years commencing October 1, 2023 and ending September 30, 2028.

If declared, the fixed quarterly dividends on the Series 32 Shares during the five years commencing October 1, 2023 will be paid at an annual rate of 6.744% ($0.4249644 per share per quarter – inoperable. See BN.PF.A : No Daycount Factor on Dividends).

Holders of Series 32 Shares have the right, at their option, exercisable not later than 5:00 p.m. (Toronto time) on September 15, 2023, to convert all or part of their Series 32 Shares, on a one-for-one basis, into Cumulative Class A Preference Shares, Series 33 (the “Series 33 Shares”), effective September 30, 2023. The quarterly floating rate dividends on the Series 33 Shares will be paid at an annual rate, calculated for each quarter, of 2.90% over the annual yield on three-month Government of Canada treasury bills. The actual quarterly dividend rate in respect of the October 1, 2023 to December 31, 2023 dividend period for the Series 33 Shares will be 2.03081% (8.057% on an annualized basis) and the dividend, if declared, for such dividend period will be $0.5077025 per share, payable on December 31, 2023.

Holders of Series 32 Shares are not required to elect to convert all or any part of their Series 32 Shares into Series 33 Shares.

As provided in the share conditions of the Series 32 Shares, (i) if Brookfield determines that there would be fewer than 1,000,000 Series 32 Shares outstanding after September 30, 2023, all remaining Series 32 Shares will be automatically converted into Series 33 Shares on a one-for-one basis effective September 30, 2023; and (ii) if Brookfield determines that there would be fewer than 1,000,000 Series 33 Shares outstanding after September 30, 2023, no Series 32 Shares will be permitted to be converted into Series 33 Shares. There are currently 11,750,299 Series 32 Shares outstanding.

The Toronto Stock Exchange (“TSX”) has conditionally approved the listing of the Series 33 Shares effective upon conversion. Listing of the Series 33 Shares is subject to Brookfield fulfilling all the listing requirements of the TSX.

BN.PF.A was issued as BAM.PF.A, a FixedReset 4.50%+290 that commenced trading 2012-3-13 after being announced 2012-3-5. The issue reset at 5.061% in 2018; I recommended against conversion; and there was no conversion. The ticker changed to BN.PF.A in late 2022. It is tracked by HIMIPref™ and assigned to the FixedResets subindex.

Thanks to Assiduous Reader Joel A for bringing this to my attention!

Update, 2023-09-06: See also BN Silent Regarding BN.PF.A Daycount Dividends
Update, 2023-09-08: See also BN.PF.A : No Daycount Factor on Dividends

BCE Inc. has announced:

Holders of BCE Inc. fixed-rate Series AQ Preferred Shares have the right to convert all or part of their shares, effective on October 3, 2023, on a one-for-one basis, into floating-rate Cumulative Redeemable First Preferred Shares, Series AR of BCE Inc. (the “Series AR Preferred Shares”). In order to convert their shares, holders must exercise their right of conversion during the conversion period, which runs from September 5, 2023 until 5:00 p.m. (Montréal/Toronto time) on September 18, 2023.
…
In order to exercise its conversion right in respect of all or part of its Series AQ Preferred Shares, the registered holder must provide a written notice thereof, accompanied by its Series AQ Preferred Share certificates with the transfer form on the back thereof or other appropriate stock transfer power of attorney duly endorsed, and deliver them, at the latest by 5:00 p.m. (Montréal/Toronto time) on September 18, 2023, to one of the following addresses of TSX Trust Company: … Beneficial holders who wish to exercise their conversion right should communicate with their broker or other nominee to obtain instructions for exercising such right during the conversion period.
…
4. The Series AQ Preferred Shares will, should they remain outstanding, pay, on a quarterly basis, as and when declared by the Board of Directors of BCE Inc., a fixed cash dividend for the following five years that will be based on a fixed rate equal to the sum of: (a) the yield to maturity compounded semi-annually (the “Government of Canada Yield”), computed on August 31, 2023 in accordance with the articles of BCE Inc., of a Canadian dollar denominated non-callable Government of Canada bond with a term to maturity of five years, and (b) 2.64%. The “Government of Canada Yield” computed on August 31, 2023 is 3.898 %. Accordingly, the annual fixed dividend rate applicable to the Series AQ Preferred Shares for the period of five years beginning on September 30, 2023 will be 6.538 %.

5. The Series AR Preferred Shares, if issued, will pay, for each quarterly period beginning with the quarterly period from and including September 30, 2023 up to but excluding December 31, 2023, as and when declared by the Board of Directors of BCE Inc., a quarterly floating dividend rate equal to the “Floating Quarterly Dividend Rate” for such quarterly period. The “Floating Quarterly Dividend Rate” for any such quarterly period shall be equal to the rate, expressed as a percentage, equal to the sum of: (a) the “T-Bill Rate”, calculated in accordance with the articles of BCE Inc. on the 30th day prior to the first day of the new quarterly period, and (b) 2.64%, calculated on the basis of the actual number of days in such quarterly period divided by 365. The “T-Bill Rate” means, for any quarterly period, the average yield expressed as a percentage per annum on three-month Government of Canada Treasury Bills, as reported by the Bank of Canada, for the most recent treasury bills auction preceding the applicable calculation date. The “Floating Quarterly Dividend Rate” computed on August 31, 2023 and applicable to the Series AR Preferred Shares for the quarterly period beginning on September 30, 2023 will be 1.96527 % (annual rate of 7.797 %, based on an initial T-Bill Rate of 5.157 %).

6. After the end of the conversion period on September 18, 2023, if BCE Inc. determines that there would be less than 1,000,000 Series AQ Preferred Shares outstanding after the conversion date (October 3, 2023), BCE Inc. will automatically convert all remaining Series AQ Preferred Shares into Series AR Preferred Shares.
However, if BCE Inc. determines that there would be less than 1,000,000 Series AR Preferred Shares outstanding after the conversion date, then no Series AQ Preferred Shares will be converted into Series ARPreferred Shares.

7. For any questions about the steps to be followed, please contact TSX Trust Company at 1-800-561-0934, the
transfer agent and registrar for BCE Inc.’s preferred shares.

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. The issue reset at 4.812% in 2018; I recommended against conversion; and there was no conversion.

Artis Real Estate Investment Trust has announced (on August 31):

that it does not intend to exercise its right to redeem all or any part of the currently outstanding Preferred Units, Series E (“Series E Units”) (AX.PR.E) on September 30, 2023. As a result, and subject to certain conditions set forth in the certificate of preferred units terms relating to the Series E Units effective March 21, 2013 (the “Certificate of Series E Unit Terms”), the holders of Series E Units have the right to elect to reclassify all or any of their Series E Units into Preferred Units, Series F (“Series F Units”) of Artis on the basis of one Series F Unit for each Series E Unit on October 2, 2023 (being the first business day after September 30, 2023).

With respect to any Series E Units that remain outstanding after October 2, 2023, holders thereof 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 for such subsequent fixed rate period by $25.00, and shall be payable quarterly on the last business day of each of March, June, September and December in each year during such subsequent fixed rate period. For the subsequent fixed rate period commencing on October 2, 2023, the annual fixed distribution rate is 7.198% per annum.

With respect to any Series F Units that may be issued on October 2, 2023, holders thereof will be entitled to receive distributions, if, as and when declared by the Board of Trustees of Artis, in an amount per Series F Unit determined by multiplying the floating quarterly distribution rate (calculated on the basis of the actual number of days elapsed in such quarterly floating rate period, divided by 365) by $25.00, which shall be payable quarterly on the last business day of such quarterly floating rate period. For the initial quarterly floating rate period commencing October 2, 2023, the floating quarterly distribution rate is 8.457% per annum.

Holders of Series E Units are not required to elect to reclassify all or any part of their Series E Units into Series F Units.

As provided in the Certificate of Series E Unit Terms: (i) if Artis determines that there would remain outstanding on October 2, 2023 less than 500,000 Series E Units, all remaining Series E Units shall be reclassified automatically into Series F Units on a one-for-one basis, effective October 2, 2023; or (ii) if Artis determines that less than 500,000 Series F Units would be issued based upon the elections of holders, then holders of Series E Units shall not be entitled to reclassify their Series E Units into Series F Units.

As at the date hereof, there are an aggregate of 3,277,110 Series E Units issued and outstanding.

The Series E Units are issued in “book entry only” form and must be purchased or transferred through a participant in the CDS depository service (each, a “CDS Participant”). All rights of holders of Series E Units must be exercised through CDS or the CDS Participant through which the Series E Units are held. The deadline for the registered holder of Series E Units to provide notice of exercise of the right to reclassify Series E Units into Series F Units is 5:00 p.m. (Toronto time) on September 18, 2023. Any notices received after this deadline will not be valid. As such, holders of Series E Units who wish to exercise their right to reclassify their Series E Units into Series F Units should contact their broker or 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 Artis does not receive an election notice in due form from a holder of Series E Units during the time fixed therefor, then the Series E Units shall be deemed not to have been reclassified (other than pursuant to an automatic reclassification). Holders of Series E Units and Series F Units will have the opportunity to reclassify their units again on October 2, 2028 (being the first business day after September 30, 2028), and every five years after September 30, 2028 as long as such units remain outstanding.

The Toronto Stock Exchange (“TSX”) has conditionally approved the listing of the Series F Units effective upon reclassification. Listing of the Series F Units is subject to Artis fulfilling all of the listing requirements of the TSX.

AX.PR.E is a FixedReset, 4.75%+330, that commenced trading 2013-3-31 after being announced 2013-3-12. The issue reset at 5.472% in 2018. I recommended against conversion and there was no conversion.

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. But investors should consult the company or their personal tax advisor before allowing this warning to influence your decision.

Brompton Group has announced:

Life & Banc Split Corp. (the “Fund”) announces that the preferred share (the “Preferred Shares”) distribution rate for the new 5-year term from October 31, 2023 to October 30, 2028 will be $0.725 per annum (7.25% on the par value of $10.00 per Preferred Share) payable quarterly. This represents a pre-tax equivalent yield of approximately 9.5%(1). The Preferred Share distribution rate is based on current market rates for preferred shares with similar terms. The term extension offers Preferred shareholders the opportunity to enjoy preferential, tax-advantaged eligible dividends until October 30, 2028. Since inception in October 2006 to July 31, 2023, the Preferred share has paid $8.61 in cash dividends and generated a 5.3% per annum return, outperforming the S&P/TSX Preferred Share Index by 3.7% per annum.(2)

Annual Compound Returns(2)	YTD	1-Year	3-Year	5-Year	10-Year	Since Inception (Oct. 17, 2006)
Preferred Shares (TSX: LBS.PR.A)	3.2%	5.6%	5.6%	5.5%	5.2%	5.3%
S&P/TSX Preferred Share Index	1.6%	-7.4%	3.7%	-0.3%	1.0%	1.6%

The Fund intends to maintain the monthly class A share (the “Class A Share”) distribution rate of $0.10 per Class A Share. Since inception to July 31, 2023, Class A shareholders have received cash distributions of $18.35 per share. Over the 1, 3, 5 and 10-year periods to July 31, 2023, the Class A Share has significantly outperformed both the S&P/TSX Capped Financials Index and the S&P/TSX Composite Index and has delivered a 10.2% per annum return since inception of the Fund approximately 17 years ago.(2) Class A shareholders have the option to benefit by reinvesting their cash distributions in a distribution reinvestment plan (“DRIP”) which is commission free to participants. Class A shareholders can enroll in the DRIP program by contacting their investment advisor.

Annual Compound Returns(2)	YTD	1-Year	3-Year	5-Year	10-Year	Since Inception (Oct. 17, 2006)
Class A Shares (TSX:LBS)	21.4%	21.4%	43.1%	11.0%	14.8%	10.2%
S&P/TSX Capped Financials Index	7.7%	6.3%	17.1%	8.1%	10.2%	8.0%
S&P/TSX Composite Index	8.5%	8.4%	11.8%	8.0%	8.4%	6.4%

The Fund invests, on an approximately equal weighted basis in a portfolio consisting of common shares of the six largest Canadian banks (currently, Bank of Montreal, Canadian Imperial Bank of Commerce, National Bank of Canada, Royal Bank of Canada, The Bank of Nova Scotia and The Toronto-Dominion Bank) and the four major publicly traded Canadian life insurance companies (currently, iA Financial Corporation Inc., Sun Life Financial Inc., Manulife Financial Corp. and Great-West Lifeco Inc.).

In connection with the extension, shareholders who do not wish to continue their investment in the Fund, will be able to retract their Preferred Shares or Class A Shares on October 30, 2023 pursuant to a special retraction right and receive a retraction price that is calculated in the same way that such price would be calculated if the Fund were to terminate on October 30, 2023. Pursuant to this option, the retraction price may be less than the market price if the share is trading at a premium to net asset value. To exercise this retraction right, shareholders must provide notice to their investment dealer by September 29, 2023 at 5:00 p.m. (Toronto time). Alternatively, shareholders may sell their Preferred Shares and/or Class A Shares through their securities dealer at the market price at any time, potentially at a higher price than would be achieved through retraction, or shareholders may take no action and continue to hold their shares.

Thanks to Assiduous Reader niagara for bringing this to my attention.