Month: March 2009

Canadian Western Bank has announced:

that it has closed the previously announced private and public offerings of 8.0 million Preferred Units for gross proceeds of $200 million. The private placement consisted of 5.4 million Preferred Units for gross proceeds of $135 million to three institutional purchasers, The bought deal public offering consisted of 2.6 million Preferred Units (“Public Offering Preferred Units”) for gross proceeds of $65 million. Genuity Capital Markets acted as agent and lead underwriter, respectively, on the transactions. Preferred Units consist of one Non-Cumulative 5-Year Rate Reset Preferred Share, Series 3 (the “Series 3 Preferred Shares”) in the capital of the Bank and a certain number of common share purchase warrants (each whole warrant a “Warrant”). Each whole Warrant is exercisable at a price of $14.00 to purchase one common share in the capital of the Bank for five years.

The Bank has granted the underwriters an option to purchase, on the same terms, up to an additional 390,000 Public Offering Preferred Units. This option is exercisable in whole or in part by the underwriters at any time within the next 30 days. The maximum gross proceeds raised under the public offering would be $74.75 million should this option be exercised in full.

It was not a particularly successful issue, trading 99,125 shares in a range of 21.95-24.00 (!!) before closing at 21.80-95.

As noted in the report of the new issue announcement, this issue will not be tracked by HIMIPref™.

Update, 2009-3-12: Canadian Western Bank has announced:

it had closed the issuance of an additional 390,000 Preferred Units as a result of the underwriters exercising their full over-allotment option under the recently announced Preferred Unit public offering. Each Preferred Unit consists of one non-cumulative 5-year rate reset preferred share, series 3 and 1.78 common share purchase warrants. Each whole warrant entitles the holder to purchase one common share of the Bank for a 5 year period at a price of $14.00 per share. The Preferred Units were sold at $25 per unit on the same terms as the public offering.
The gross proceeds from the exercise of the over-allotment were $9,750,000. Total gross proceeds from the private offering of Preferred Units, the public offering of Preferred Units and the exercise of the over-allotment option were $209,750,000.

CWB.PR.A closed today at 21.60-70, 10×26. Somebody really wants those warrants!

Sixty Split Corp. has announced:

that it has called 8,298 Preferred Shares for cash redemption on March 13, 2009 (in accordance with the Company’s Articles) representing approximately 1.219% of the outstanding Preferred Shares as a result of the special annual retraction of 85,596 Capital Shares by the holders thereof. The Preferred Shares shall be redeemed on a pro rata basis, so that each holder of Preferred Shares of record on March 12, 2009 will have approximately 1.219% of their Preferred Shares redeemed. The redemption price for the Preferred Shares will be $25.00 per share

Holders of Preferred Shares that are on record for dividends but have been called for redemption will be entitled to receive dividends thereon which have been declared but remain unpaid up to but not including March 13, 2009.

SXT.PR.A is tracked by HIMIPref™ but is not currently included in the HIMIPref™ Indices due to low averageTradingValue. It was last moved to “Scraps” on the March 30, 2007 Rebalancing.

Fitch Ratings has announced it:

has downgraded the ratings of Manulife Financial Corporation (MFC) and its operating subsidiaries. At the same time Fitch assigns an ‘A’ rating to MFC’s Non-cumulative Preferred Class A, Series 4. The Rating Outlook is Negative. (See complete list of ratings actions at the end of this release.)

The rating action reflects Fitch’s updated review of MFC’s exposure to the volatile global equity market conditions, which are having a negative impact on MFC’s earnings performance and capital levels. In Fitch’s view, MFC’s earnings and capital volatility are outside of Fitch’s rating rationale for the prior ratings. The key driver of this heightened volatility is the combination of MFC’s outsized, unhedged equity market exposure and the potential for further equity market declines in the next 12 to 18 months.

The total effect of the approximately 23% decline in global equity markets in fourth-quarter 2008 was estimated to account for $2.9 billion of MFC’s reported $1.9 billion net loss available to common shareholders. MFC’s high degree of sensitivity to the equity markets was driven primarily by significant increased actuarial reserving for guarantees on its $74 billion book of guaranteed segregated funds /variable annuities business. Additional drivers were declines in values of common equities in the investment portfolios of its operating entities, as well as its equity exposure to variable life reserves, and declining fee revenue.

Fitch notes that this equity market volatility is two-sided and that a significant advance in equity market levels could result in increases in reported earnings and capital for MFC due to declining reserving and capital requirements on the segregated fund/variable annuity guarantee business.

While Fitch views the capitalization of MFC’s operating companies as quite strong at year-end 2008 when measured by risked-based capital metrics, these levels are being challenged due to the recent equity market declines and anticipated increases in actuarial reserve and capital requirements related to the large block of unhedged variable annuity guarantees written before 2008. Fitch does not envision any near-term liquidity problems as the guarantees are not near-term cash claims.

Fitch believes MFC has good financial flexibility and the ability to raise capital to meet potential capital requirements and/or potential acquisition-related needs at the new rating levels through the issuance of debt or additional forms of equity through its recently increased Canadian and new U.S. shelf registrations.

Fitch rates Sun Life Financial Preferreds at “A”; Great-West Lifeco Preferreds at “A”; and National Bank Preferreds at “A”; inter alia.

Manulife has the following preferreds outstanding: MFC.PR.A (OpRet); MFC.PR.B (PerpetualDiscount); and MFC.PR.C (PerpetualDiscount). These issues were last mentioned on PrefBlog when S&P Downgraded to P-1(low) on February 24.

US Financial 15 Split Corp. has announced:

that it has suspended its regular monthly dividends effectively immediately for Priority Equity (“Preferred”) shareholders in order to preserve cash and to assist in rebuilding the net asset value in an attempt to meet longer term objectives. Since the Preferred shares are cumulative, this suspended dividend (and all subsequent dividends not paid) will be accrued to the benefit of the Preferred shareholders and recorded as a liability in the Company’s net asset value. Also, there will not be a distribution paid to Class A Shares for February 27, 2009 as per the Prospectus which states no regular monthly dividends or other distributions will be paid on the Class A Shares in any month as long as the net asset value per unit is equal to or less than $15.00. The net asset value as of February 13, 2009 was $4.17 and has been adversely impacted by the significant declines in the US financial services companies held in the portfolio.

FTU.PR.A was last mentioned on PrefBlog in October when DBRS ceased coverage at the request of Quadra. Quadra has also suspended dividends on XMF.PR.A and XCM.PR.A, with considerably less provocation.

FTU.PR.A is tracked by HIMIPref™. It was moved from the SplitShares subIndex to “Scraps” in April 2008 on credit concerns.