PrefBlog

Manulife Financial Corporation has announced:

a Canadian public offering of Non-cumulative Rate Reset Class 1 Shares Series 23 (“Series 23 Preferred Shares”). Manulife will issue 14 million Series 23 Preferred Shares priced at $25 per share to raise gross proceeds of $350 million. The offering will be underwritten by a syndicate of investment dealers co-led by RBC Capital Markets, BMO Capital Markets and Scotiabank and is anticipated to qualify as Tier 1 capital for Manulife. Manulife has also granted the underwriters an option, exercisable in whole or in part at any time up to 48 hours prior to closing, to purchase up to an additional 2 million Series 23 Preferred Shares at the same offering price. The gross proceeds raised under the offering will be $400 million should this option be exercised in full. The expected closing date for the offering is November 22, 2016. Manulife intends to file a prospectus supplement to its December 17, 2015 base shelf prospectus in respect of this issue.

Holders of the Series 23 Preferred Shares will be entitled to receive a non-cumulative quarterly fixed dividend yielding 4.85 per cent annually, as and when declared by the Board of Directors of Manulife, for the initial period ending March 19, 2022. Thereafter, the dividend rate will be reset every five years at a rate equal to the 5-year Government of Canada bond yield plus 3.83 per cent.

Holders of Series 23 Preferred Shares will have the right, at their option, to convert their shares into Non-cumulative Floating Rate Class 1 Shares Series 24 (“Series 24 Preferred Shares”), subject to certain conditions, on March 19, 2022 and on March 19 every five years thereafter. Holders of the Series 24 Preferred Shares will be entitled to receive non-cumulative quarterly floating dividends, as and when declared by the Board of Directors of Manulife, at a rate equal to the three-month Government of Canada Treasury Bill yield plus 3.83 per cent.

Manulife intends to use the net proceeds from the offering for general corporate purposes.

They later announced:

that as a result of strong investor demand for its previously announced Canadian public offering of Non-cumulative Rate Reset Class 1 Shares Series 23 (“Series 23 Preferred Shares”), the size of the offering has been increased to 19 million shares. The gross proceeds of the offering will now be $475 million. The offering will be underwritten by a syndicate of investment dealers co-led by RBC Capital Markets, BMO Capital Markets and Scotiabank and is anticipated to qualify as Tier 1 capital for Manulife. The expected closing date for the offering is November 22, 2016. Manulife intends to file a prospectus supplement to its December 17, 2015 base shelf prospectus in respect of this issue.

Manulife intends to use the net proceeds from the offering for general corporate purposes.

Implied Volatility analysis suggests that the issue is actually a little rich compared to its peers:

Click for Big

TransCanada Corporation has announced:

that it will issue 20 million cumulative redeemable minimum rate reset first preferred shares, series 15 (the “Series 15 Preferred Shares”) at a price of $25.00 per share for aggregate gross proceeds of $500 million on a bought deal basis to a syndicate of underwriters in Canada led by Scotiabank, BMO Capital Markets, CIBC Capital Markets, RBC Capital Markets and TD Securities Inc.

The holders of Series 15 Preferred Shares will be entitled to receive fixed cumulative dividends at an annual rate of $1.2250 per share, payable quarterly on the last business day of February, May, August and November, as and when declared by the board of directors of TransCanada. The Series 15 Preferred Shares will yield 4.90 per cent per annum for the initial fixed rate period ending May 31, 2022 with the first dividend payment date scheduled for February 28, 2017. The dividend rate will reset on May 31, 2022 and on the last business day of May in every fifth year thereafter to a rate equal to the sum of the then five-year Government of Canada bond yield plus 3.85 per cent, provided that, in any event, such rate shall not be less than 4.90 per cent per annum. The Series 15 Preferred Shares are redeemable by TransCanada, at its option, on May 31, 2022 and on the last business day of May in every fifth year thereafter at a price of $25.00 per share plus accrued and unpaid dividends.

The holders of Series 15 Preferred Shares will have the right to convert their shares into cumulative redeemable first preferred shares, series 16 (the “Series 16 Preferred Shares”), subject to certain conditions, on May 31, 2022 and on the last business day of May in every fifth year thereafter. The holders of Series 16 Preferred Shares will be entitled to receive quarterly floating rate cumulative dividends, as and when declared by the board of directors of TransCanada, at an annualized rate equal to the sum of the then 90-day Government of Canada treasury bill rate plus 3.85 per cent.

TransCanada has granted to the underwriters an option, exercisable at any time up to 48 hours prior to the closing of the offering, to purchase up to an additional 2 million Series 15 Preferred Shares at a price of $25.00 per share.

The anticipated closing date is November 21, 2016. The net proceeds of the offering will be used for general corporate purposes and to reduce short term indebtedness of TransCanada and its affiliates, which short term indebtedness was used to fund TransCanada’s capital program and for general corporate purposes.

The Series 15 Preferred Shares will be offered to the public in Canada pursuant to a prospectus supplement that will be filed with securities regulatory authorities in Canada under TransCanada’s short form base shelf prospectus dated December 23, 2015. The securities referred to herein have not been and will not be registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.

They later announced:

that as a result of strong investor demand for its previously announced offering of cumulative redeemable minimum rate reset first preferred shares, series 15 (the “Series 15 Preferred Shares”), the size of the offering has been increased to 40 million shares. The offering no longer includes the previously granted underwriters’ option. The aggregate gross proceeds of the offering will now be $1.0 billion. The syndicate of underwriters is led by Scotiabank, BMO Capital Markets, CIBC Capital Markets, RBC Capital Markets and TD Securities Inc.

The anticipated closing date is November 21, 2016. The net proceeds of the offering will be used for general corporate purposes and to reduce short term indebtedness of TransCanada and its affiliates, which short term indebtedness was used to fund TransCanada’s capital program and for general corporate purposes.

Surprisingly, this issue looks a shade expensive when the TRP series is subjected to Implied Volatility analysis:

Click for Big

However, there will be those who say that the presence of the minimum reset guarantee more than offsets the $0.25 richness of the issue price.

Brookfield Asset Management Inc. has announced:

that it has agreed to issue 10,000,000 Class A Preferred Shares, Series 46 on a bought deal basis to a syndicate of underwriters led by TD Securities Inc. and Scotiabank for distribution to the public. The Preferred Shares, Series 46 will be issued at a price of C$25.00 per share, for gross proceeds of C$250,000,000. Holders of the Preferred Shares, Series 46 will be entitled to receive a cumulative quarterly fixed dividend yielding 4.80% annually for the initial period ending March 31, 2022. Thereafter, the dividend rate will be reset every five years at a rate equal to the greater of: (i) the 5-year Government of Canada bond yield plus 3.85% and (ii) 4.80%.

Brookfield has granted the underwriters an option, exercisable until 48 hours prior to closing, to purchase up to an additional 2,000,000 Preferred Shares, Series 46 which, if exercised, would increase the gross offering size to C$300,000,000. The Preferred Shares, Series 46 will be offered in all provinces of Canada by way of a supplement to Brookfield’s existing short form base shelf prospectus. The Preferred Shares, Series 46 may not be offered or sold in the United States or to U.S. persons absent registration or an applicable exemption from the registration requirements under the U.S. Securities Act.

Brookfield intends to use the net proceeds of the issue of Preferred Shares, Series 46 for general corporate purposes. The offering of Preferred Shares, Series 46 is expected to close on or about November 18, 2016.

As is usually the case for the BAM series, Implied Volatility analysis yields a mess:

Click for Big

Update, 2016-11-14: They later announced:

that as a result of strong investor demand for its previously announced offering, the underwriters have exercised their option to increase the size of the offering to 12,000,000 Class A Preferred Shares, Series 46. The Preferred Shares, Series 46 will be issued at a price of C$25.00 per share, for gross proceeds of C$300,000,000. The Preferred Shares, Series 46 are being issued on a bought deal basis to a syndicate of underwriters led by TD Securities Inc. and Scotiabank for distribution to the public.

The Preferred Shares, Series 46 will be offered in all provinces of Canada by way of a supplement to Brookfield’s existing short form base shelf prospectus. The Preferred Shares, Series 46 may not be offered or sold in the United States or to U.S. persons absent registration or an applicable exemption from the registration requirements under the U.S. Securities Act.

Brookfield intends to use the net proceeds of the issue of Preferred Shares, Series 46 for general corporate purposes. The offering of Preferred Shares, Series 46 is expected to close on or about November 18, 2016.