PrefBlog

National Bank of Canada has announced:

the dividend rates applicable to the Non-Cumulative 5-Year Rate Reset First Preferred Shares, Series 38 Non-Viability Contingent Capital (NVCC) (the “Series 38 Shares”) and the Non-Cumulative Floating Rate First Preferred Shares, Series 39 (NVCC) (the “Series 39 Shares”).

Holders of Series 38 Shares, should any remain outstanding after November 15, 2022, will be entitled to receive fixed rate non-cumulative preferential cash dividends on a quarterly basis, as and when declared by the Board of Directors of the Bank and subject to the provisions of the Bank Act (Canada). The dividend rate for the five-year period commencing on November 16, 2022, and ending on November 15, 2027, will be 7.027% being equal to the sum of the five-year Government of Canada Bond yield (3.597%) plus 3.43%, as determined in accordance with the terms of the Series 38 Shares.

Holders of Series 39 Shares, should any be issued on November 15, 2022, will be entitled to receive floating rate non-cumulative preferential cash dividends on a quarterly basis, as and when declared by the Board of Directors of the Bank and subject to the provisions of the Bank Act (Canada). The dividend rate for the three-month period commencing on November 16, 2022, and ending on February 15, 2023, will be 7.256%, being equal to the sum of the 90-day Government of Canada Treasury Bill yield (3.826%) plus 3.43%, calculated on the basis of actual number of days elapsed in such quarterly floating rate period divided by 365, as determined in accordance with the terms of the Series 39 Shares.

Holders of the Series 38 Shares have, subject to certain conditions, the right to convert all or part of their Series 38 Shares on a one-for-one basis into Series 39 Shares on November 15, 2022.

Beneficial owners of Series 38 shares who wish to exercise their conversion right should communicate as soon as possible with their broker or other nominee and ensure that they follow their instructions in order to meet the deadline to exercise such right, which is October 31, 2022, at 5:00 p.m. (EDT).

NA.PR.C is a FixedReset, 4.45%+343, NVCC-compliant, that commenced trading 2017-6-13 after being announced 2017-6-1. Notice of extension was given in 2022. It is tracked by HIMIPref™ and has been assigned to the FixedResets (Discount) subindex.

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

Pembina Pipeline Corporation has announced:

its intention to redeem its issued and outstanding Cumulative Redeemable Minimum Rate Reset Class A Preferred Shares, Series 23 (“Series 23 Shares”) (TSX: PPL.PF.C) on November 15, 2022 (the “Redemption Date”).

Pembina intends to redeem all of its 12,000,000 issued and outstanding Series 23 Shares, in accordance with the terms of the Series 23 Shares, as set out in the Company’s articles of amendment dated December 16, 2019, on the Redemption Date for a redemption price equal to $25.00 per Series 23 Share (the “Redemption Price”), less any tax required to be deducted or withheld by the Company. The total redemption price to Pembina will be $300 million.

As previously announced, the dividend payable on November 15, 2022, to holders of the Series 23 Shares of record on October 31, 2022, will be $0.328125 per Series 23 Share. This will be the final quarterly dividend on the Series 23 Shares. Upon payment of the November 15, 2022, dividend, there will be no accrued and unpaid dividends on the Series 23 Shares as at the Redemption Date.

The Company has provided notice today of the Redemption Price and the Redemption Date to the sole registered holder of the Series 23 Shares in accordance with the terms of the Series 23 Shares, as set out in the Company’s articles of amendment dated December 16, 2019. For non-registered holders of Series 23 Shares, no further action is required however, they should contact their broker or other intermediary with any questions regarding the redemption process for the Series 23 Shares in which they hold a beneficial interest. The Company’s transfer agent for the Series 23 Shares is Computershare Investor Services Inc. Questions regarding the redemption process may also be directed to Computershare at 1-800-564-6253 or by email to corporateactions@computershare.com.

PPL.PF.C was originally issued as KML.PR.A; the ticker changed in December, 2019. KML.PR.A was a FixedReset 5.25%+365M525 that commenced trading 2017-8-15 after being announced 2017-8-3. It has been tracked by HIMIPref™ but relegated to the Scraps – FixedReset Discount subindex on credit concerns. There was some, although not universal, expectation of redemption; PPL.PF.C was yielding significantly less than its peers at today’s closing quote of 24.05-20; however, the low yield may be more reflective of the Minimum Rate Guarantee than of redemption expectations.

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

DBRS has announced that it:

changed the trend to Positive from Stable, and confirmed all ratings of Intact Financial Corporation (Intact or the Company) and its operating insurance subsidiaries, including the Financial Strength Rating (FSR) of its main operating insurance subsidiaries at AA (low) and Intact’s “A” Issuer Rating. The trend on the ratings of RSA Insurance Group Limited, Intact’s UK-based subsidiary, was also changed to Positive (see “DBRS Morningstar Changes Trend on RSA Insurance Group Limited and its Operating Entities to Positive from Stable; Confirms Financial Strength Ratings at AA (low)”).
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The Company’s risk profile reflects its prudent approach to risk management, and its high-quality investment portfolio is based on a high proportion of readily marketable bonds and equities. Derivatives are utilized strictly for hedging purposes. Intact’s approach to managing its investment portfolio has allowed it to earn significant investment returns over the years and to withstand market volatility reasonably well. The commercial products portfolio is well diversified, but DBRS Morningstar notes that it is exposed to systemic risk arising from its cyber insurance offerings. In addition to traditional catastrophic risk exposures, which it mitigates primarily through reinsurance and policy terms and conditions, the Company has undertaken actions to reduce its earthquake risk exposure in Canada, which DBRS Morningstar views positively.

Intact’s earnings ability reflects its strong underwriting and pricing discipline across its business segments and geographies, combined with solid revenue generation from its distribution businesses. The Company’s net earnings have proven to be strong and resilient over time with a very good combined ratio of 90%, based on a three-year weighted average, as calculated by DBRS Morningstar.

The Company maintains ample liquidity resources to deal with potential cash demands under reasonably severe stress scenarios. Its investment portfolio consists of a high proportion of marketable bonds and equities, in addition to its substantial cash and short-term investment holdings. Reinsurance cover is available to limit the impact of losses that exceed retention thresholds.

Intact’s regulatory capital ratios for its standalone entities reflect appropriate buffers above required solvency levels, allowing the Company to handle reasonably adverse events. Fixed charge coverage ratios are high as a result of Intact’s consistently strong net earnings. Financial leverage has also returned to its pre-acquisition level.

Affected issues are IFC.PR.A, IFC.PR.C, IFC.PR.E, IFC.PR.F, IFC.PR.G, IFC.PR.I and IFC.PR.K.