PrefBlog

Brompton Funds has announced (on 2025-10-6):

Life & Banc Split Corp. (the “Fund”) is pleased to announce its intention to complete a stock split of its class A shares (the “Share Split”) due to the Fund’s strong performance. Class A shareholders of record at the close of business on October 27, 2025 will receive 10 additional class A shares for every 100 class A shares held, pursuant to the Share Split. The Share Split is subject to the approval of the Toronto Stock Exchange (the “TSX”).

Class A shareholders will continue to receive regular monthly cash distributions targeted to be $0.10 per class A share following the Share Split. As a result, the total dollar amount of distributions to be paid to class A shareholders is expected to increase by approximately 10%. The Fund provides a distribution reinvestment plan, on a commission-free basis for class A shareholders that wish to reinvest distributions and realize the benefits of compound growth.

Over the last 10 years, the class A shares have delivered a 20.5% per annum total return based on net asset value, outperforming the S&P/TSX Capped Financials Total Return Index by 6.8% per annum and the S&P/TSX Composite Total Return Index by 8.7% per annum.(1) Since inception, class A shareholders have received cash distributions of $20.95 per share.

Following the completion of the Share Split, the preferred shares of the Fund are expected to have downside protection from a decline in the value of the Fund’s portfolio of approximately 52%.(2)

The class A shares are expected to commence trading on an ex-split basis at the opening of trading on October 27, 2025. No fractional class A shares will be issued and the number of class A shares each holder shall receive will be rounded down to the nearest whole number. The Share Split is a non-taxable event.

The Fund invests on an approximately equally weighted basis in a portfolio consisting of common shares of the six largest Canadian banks and the four major publicly traded Canadian life insurance companies:

Bank of Montreal	Great-West Lifeco Inc.
National Bank of Canada	The Bank of Nova Scotia
Canadian Imperial Bank of Commerce	Royal Bank of Canada
iA Financial Corporation Inc.	The Toronto-Dominion Bank
Sun Life Financial Inc.	Manulife Financial Corporation

This harms the credit quality of the preferreds by increasing the cash drag (due to increased distributions to the Capital Units due to the split) and by decreasing the Asset Coverage ratio. However, with a Whole Unit NAVPU of 22.31 as of 2025-10-9, there is no immediate cause for alarm.

My guess is that they’re doing this to increase the leverage provided by owning the Capital Units, given my assumption that this is what these shareholders want.

Brompton Funds has announced (on 2025-10-6):

Brompton Split Banc Corp. (the “Fund”) is pleased to announce its intention to complete a stock split of its class A shares (the “Share Split”) due to the Fund’s strong performance. Class A shareholders of record at the close of business on October 27, 2025 will receive 17 additional class A shares for every 100 class A shares held, pursuant to the Share Split. The Share Split is subject to the approval of the Toronto Stock Exchange (the “TSX”).

Class A shareholders will continue to receive regular monthly cash distributions targeted to be $0.10 per class A share following the Share Split. As a result, the total dollar amount of distributions to be paid to class A shareholders is expected to increase by approximately 17%. The Fund provides a distribution reinvestment plan, on a commission-free basis for class A shareholders that wish to reinvest distributions and realize the benefits of compound growth.

Over the last 10 years, the class A shares have delivered a 18.4% per annum total return based on net asset value, outperforming the S&P/TSX Equal Weight Diversified Banks Total Return Index by 5.1% per annum and the S&P/TSX Composite Total Return Index by 6.6% per annum.(1) Since inception, class A shareholders have received cash distributions of $23.45 per share.

Following the completion of the Share Split, the preferred shares of the Fund are expected to have downside protection from a decline in the value of the Fund’s portfolio of approximately 55%.(2)

The class A shares are expected to commence trading on an ex-split basis at the opening of trading on October 27, 2025. No fractional class A shares will be issued and the number of class A shares each holder shall receive will be rounded down to the nearest whole number. The Share Split is a non-taxable event.

The Fund invests on an approximately equally weighted basis in a portfolio (the “Portfolio”) of common shares of the six largest Canadian banks: Royal Bank of Canada, The Bank of Nova Scotia, National Bank of Canada, The Toronto-Dominion Bank, Canadian Imperial Bank of Commerce and Bank of Montreal. In addition, the Fund may hold up to 10% of the total assets of the Portfolio in investments in global financial companies for the purpose of enhanced diversification and return potential.

This harms the credit quality of the preferreds by increasing the cash drag (due to increased distributions to the Capital Units due to the split) and by decreasing the Asset Coverage ratio. However, with a Whole Unit NAVPU of 24.15 as of 2025-10-9, there is no immediate cause for alarm.

My guess is that they’re doing this to increase the leverage provided by owning the Capital Units, given my assumption that this is what these shareholders want.

Update, 2025-12-2: Brompton has announced a treasury offering of preferreds only:

Brompton Split Banc Corp. (the “Fund”) is pleased to announce it isundertaking a treasury offering of preferred shares (“Preferred Shares”) (the “Offering”).

The sales period for this offering is expected to end on Wednesday, December 3, 2025. The offering is expected to close on or about December 10, 2025 and is subject to certain closing conditions including approval by the Toronto Stock Exchange (“TSX”).

The Preferred Shares will be offered at a price of $10.40 per Preferred Share to yield 6.0%.
(1) The closing price on the TSX for the Preferred Shares on December 1, 2025 was $10.54. The offering is being led by RBC Capital Markets.

The investment objectives for the Preferred Shares are to provide holders with fixed cumulative preferential quarterly cash distributions, in the amount of $0.15625 per Preferred Share (6.25% per annum on the original $10.00 issue price), and to return the original issue price to holders of Preferred Shares on November 29, 2027.

The Fund has declared aggregate dividends on the Preferred Shares of $10.22 per Preferred Share, representing 80 consecutive quarterly dividends since inception on November 16, 2005.

Based on the most recently calculated net asset value per unit of the Fund on November 27, 2025, the Preferred Shares have downside protection from a decline in the value of the Fund’s portfolio of approximately 57%. The Preferred Shares have a Morningstar DBRS rating of Pfd-3.

The Fund invests on an approximately equally weighted basis in a portfolio (the “Portfolio”) of common shares of the six largest Canadian banks: Royal Bank of Canada, The Bank of Nova Scotia, National Bank of Canada, The Toronto-Dominion Bank, Canadian Imperial Bank of Commerce and Bank of Montreal. In addition, the Fund may hold up to 10% of the total assets of the Portfolio in investments in global financial companies for the purpose of enhanced diversification and return potential.

On October 6, TC Energy Corporation announced:

that TransCanada PipeLines Limited (TCPL) is considering an offering of U.S. Junior Subordinated Notes (Notes).

If a successful offering is completed, the Company intends to use the net proceeds to redeem its issued and outstanding Cumulative Redeemable First Preferred Shares, Series 11 (TSX:TRP.PR.G) pursuant to their terms, to reduce indebtedness as well as for general corporate purposes. There is no certainty that TCPL will ultimately complete the offering being considered or as to the timing or terms on which such an offering might be completed.

It is expected that, if the offering is commenced, the Notes would be issued by way of a prospectus supplement to TCPL’s short form base shelf prospectus dated Dec. 5, 2024 included in its registration statement on Form F-10 filed with the U.S. Securities and Exchange Commission (SEC). A copy of such prospectus supplement will be available free of charge on the SEC website at http://www.sec.gov or potential investors may request such prospectus supplement from Morgan Stanley & Co. LLC toll free at +1 (866) 718-1649, BofA Securities, Inc. toll free at +1 (800) 294-1322, J.P. Morgan Securities LLC collect at +1 (212) 834-4533, RBC Capital Markets, LLC toll free at +1 (866) 375-6829 or Wells Fargo Securities LLC toll free at +1 (800) 645-3751.

This morning, we learned:

On October 6, 2025, TransCanada PipeLines Limited entered into an underwriting agreement with major financial institutions including Morgan Stanley and BofA Securities for the issuance of 6.250% Junior Subordinated Notes due 2085.

… which may not be huge news, but it’s a step up from “considering”!

The company announced today:

that TransCanada PipeLines Limited (TCPL) has closed an offering of US$350 million of 6.250 per cent Fixed-for-Life Junior Subordinated Notes due Nov. 1, 2085 (Notes). The Notes were offered through a syndicate of underwriters, co-led by Morgan Stanley & Co. LLC, BofA Securities, Inc., J.P. Morgan Securities LLC, RBC Capital Markets, LLC and Wells Fargo Securities, LLC.

As previously announced, the Company intends to use the net proceeds to redeem (Redemption) its issued and outstanding Cumulative Redeemable First Preferred Shares, Series 11 (Series 11 Shares) (TSX:TRP.PR.G) on Nov. 28, 2025 (Redemption Date) at a price equal to $25.00 per share (Redemption Price), to reduce indebtedness as well as for general corporate purposes. The Company provided notice of the Redemption today to the sole registered holder of the Series 11 Shares in accordance with their terms.

Subject to board approval, the Company expects to declare a final quarterly dividend of $0.2094375 per Series 11 Share, for the period up to but excluding Nov. 28, 2025, payable on Nov. 28, 2025 to shareholders of record on Nov. 17, 2025. This would be the final dividend on the Series 11 Shares and, as the Redemption Date is also a dividend payment date, the Redemption Price will not include any accrued and unpaid dividends. Subsequent to the Redemption Date, the Series 11 Shares will cease to be entitled to dividends and will be delisted from the Toronto Stock Exchange.

Non-registered holders of Series 11 Shares should contact their broker or other intermediary for information regarding the redemption process for the Series 11 Shares in which they hold a beneficial interest.

The Notes were issued by way of a prospectus supplement dated Oct. 6, 2025 to TCPL’s short form base shelf prospectus dated Dec. 5, 2024 (collectively, the Prospectus) included in its registration statement on Form F-10 filed with the U.S. Securities and Exchange Commission.

TRP.PR.G was issued as a FixedReset, 3.80%+296, that commenced trading 2015-3-2 after being announced 2015-2-23. It reset to 3.351% effective 2020-11-30 and there was no conversion. The issue is tracked by HIMIPref™ and is assigned to the Scraps – FixedReset-Discount subindex.

The market’s been pricing this in for a while, with remarkably similar spreads derived from Implied Volatility Analysis for the past while, despite the perplexing and annoying negative slope of the correlation (on which the analysis sets a floor of 1%, since lower values don’t make any sense. There are other things going on, like the market betting heavily that high-reset issues have an outsized probability of redemption):

Still, it’s nice to get some reassurance from TRP that yes, the preferred share market is still cheap compared to alternative sources of funding!

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