PrefBlog

Manulife Financial Corporation has announced:

that it does not intend to exercise its right to redeem all or any of its currently outstanding 8,000,000 Non-cumulative Rate Reset Class 1 Shares Series 15 (the “Series 15 Preferred Shares”) (TSX: MFC.PR.L) on June 19, 2019. As a result, subject to certain conditions described in the prospectus supplement dated February 18, 2014 relating to the issuance of the Series 15 Preferred Shares (the “Prospectus”), the holders of the Series 15 Preferred Shares have the right, at their option, to convert all or part of their Series 15 Preferred Shares on a one-for-one basis into Non-cumulative Floating Rate Class 1 Shares Series 16 of Manulife (the “Series 16 Preferred Shares”) on June 19, 2019. A formal notice of the right to convert Series 15 Preferred Shares into Series 16 Preferred Shares will be sent to the registered holders of the Series 15 Preferred Shares in accordance with the share conditions of the Series 15 Preferred Shares. Holders of Series 15 Preferred Shares are not required to elect to convert all or any part of their Series 15 Preferred Shares into Series 16 Preferred Shares. Holders who do not exercise their right to convert their Series 15 Preferred Shares into Series 16 Preferred Shares on such date will retain their Series 15 Preferred Shares, unless automatically converted in accordance with the conditions below.

The foregoing conversion right is subject to the conditions that: (i) if, after June 4, 2019, Manulife determines that there would be less than 1,000,000 Series 15 Preferred Shares outstanding on June 19, 2019, then all remaining Series 15 Preferred Shares will automatically be converted into an equal number of Series 16 Preferred Shares on June 19, 2019, and (ii) alternatively, if, after June 4, 2019, Manulife determines that there would be less than 1,000,000 Series 16 Preferred Shares outstanding on June 19, 2019, then no Series 15 Preferred Shares will be converted into Series 16 Preferred Shares. In either case, Manulife will give written notice to that effect to any registered holders of Series 15 Preferred Shares affected by the preceding minimums on or before June 11, 2019.

The dividend rate applicable to the Series 15 Preferred Shares for the 5-year period commencing on June 20, 2019, and ending on June 19, 2024, and the dividend rate applicable to the Series 16 Preferred Shares for the 3-month period commencing on June 20, 2019, and ending on September 19, 2019, will be determined and announced by way of a news release on May 21, 2019. Manulife will also give written notice of these dividend rates to the registered holders of Series 15 Preferred Shares.

Beneficial owners of Series 15 Preferred Shares who wish to exercise their right of conversion should instruct their broker or other nominee to exercise such right before 5:00 p.m. (Toronto time) on June 4, 2019. Conversion inquiries should be directed to Manulife’s Registrar and Transfer Agent, AST Trust Company (Canada), at 1-800-783-9495.

Subject to certain conditions described in the Prospectus, Manulife may redeem the Series 15 Preferred Shares, in whole or in part, on June 19, 2024 and on June 19 every five years thereafter and may redeem the Series 16 Preferred Shares, in whole or in part, after June 19, 2019.

The Toronto Stock Exchange (“TSX”) has conditionally approved the listing of the Series 16 Preferred Shares effective upon conversion. Listing of the Series 16 Preferred Shares is subject to Manulife fulfilling all the listing requirements of the TSX and, upon approval, the Series 16 Preferred Shares will be listed on the TSX under the trading symbol “MFC.PR.S”.

MFC.PR.L is a FixedReset, 3.90%+216, that commenced trading 2014-2-25 after being announced 2014-2-18. This issue is tracked by HIMIPref™ an assigned to the FixedReset-Insurance-nonNVCC subindex. As it is issued by an Insurance Holding Company and is not compliant with the banks’ NVCC rules which I expect to be extended to the insurance sector, I have added a “Deemed Maturity” entry to the call schedule for analytical purposes, dated 2030-1-31, at 25.00.

I will have more commentary when the reset rate is announced on May 21.

Laurentian Bank of Canada has announced:

that it does not intend to exercise its right to redeem all or any of its currently outstanding Non-Cumulative Class A Preferred Shares, Series 13 (the “Preferred Shares Series 13”) (TSX: LB.PR.H) on June 15, 2019. As a result, subject to certain conditions described in the prospectus supplement dated March 27, 2014 relating to the issuance of the Preferred Shares Series 13 (the “Prospectus”), the holders of the Preferred Shares Series 13 have the right, at their option, to convert any or all of their Preferred Shares Series 13 into an equal number of the Bank’s Non-Cumulative Class A Preferred Shares, Series 14 (the “Preferred Shares Series 14”) on June 17, 2019. This date is the first business day following the conversion date of June 15, 2019, identified in the Prospectus, which falls on a Saturday. In accordance with the share conditions, a written notice of the right to convert Preferred Shares Series 13 into Preferred Shares Series 14 will be sent to the registered holders of the Preferred Shares Series 13. Holders of Preferred Shares Series 13 are not required to elect to convert all or any part of their Preferred Shares Series 13 into Preferred Shares Series 14. Holders who do not exercise their right to convert their Preferred Shares Series 13 into Preferred Shares Series 14 on such date will retain their Preferred Shares Series 13, unless automatically converted in accordance with the conditions below.

The foregoing conversion right is subject to the conditions that: (i) if, after May 31, 2019, the Bank determines that there would be less than 1,000,000 Preferred Shares Series 14 outstanding on June 17, 2019, then no Preferred Shares Series 13 will be converted into Preferred Shares Series 14, and (ii) alternatively, if after, May 31, 2019, the Bank determines that there would be less than 1,000,000 Preferred Shares Series 13 outstanding on June 17, 2019, then all remaining Preferred Shares Series 13 will automatically be converted into an equal number of Preferred Shares Series 14 on June 17, 2019. In either case, the Bank will give written notice to that effect to any registered holders of Preferred Shares Series 13 affected by the preceding minimums on or before June 7, 2019.

The dividend rate applicable to the Preferred Shares Series 13 for the five-year period from and including June 15, 2019 to, but excluding, June 15, 2024, and the dividend rate applicable to the Preferred Shares Series 14 for the three-month period from and including June 15, 2019 to, but excluding, September 15, 2019, will be determined and announced by way of a news release on May 16, 2019. The Bank will also give written notice of these dividend rates to the registered holders of Preferred Shares Series 13.

Beneficial owners of Preferred Shares Series 13 who wish to exercise their right of conversion should instruct their broker or other nominee to exercise such right before 5:00 p.m. (Montreal time) on May 31, 2019. Conversion inquiries should be directed to the Bank’s Registrar and Transfer Agent, Computershare Investor Services Inc., at 1-800-564-6253.

The Toronto Stock Exchange (“TSX”) has conditionally approved the listing of the Preferred Shares Series 14 effective upon conversion. Listing of the Preferred Shares Series 14 is subject to the Bank fulfilling all the listing requirements of the TSX.

LB.PR.H is a NVCC-compliant FixedReset, 4.30%+255, that commenced trading 2014-4-3 after being announced 2014-3-25. This issue is tracked by HIMIPref™ but relegated to the Scraps FixedReset-Discount subindex on credit concerns.

I will have more commentary when the reset rate is announced on May 16.