PrefBlog

CU Inc. has announced:

that after having taken into account all election notices following the May 17, 2016 conversion deadline for the Cumulative Redeemable Preferred Shares Series 4 (“Series 4 Preferred Shares”) tendered for conversion into Cumulative Redeemable Preferred Shares Series 5 (“Series 5 Preferred Shares”), the holders of Series 4 Preferred Shares are not entitled to convert their Series 4 Preferred Shares into Series 5 Preferred Shares. There were approximately 204,540 Series 4 Preferred Shares tendered for conversion, which is less than the one million shares required to give effect to conversions into Series 5 Preferred Shares.

The Series 4 Preferred Shares will continue to pay on a quarterly basis, for the five-year period beginning on June 1, 2016, as and when declared by the Board of Directors of CU Inc., a fixed dividend based on an annual dividend rate of 2.24%.

For more information on the terms of, and risks associated with an investment in, the Series 4 Preferred Shares, please see CU Inc.’s short form prospectus dated November 24, 2010, which can be found under CU Inc.’s profile on SEDAR at www.sedar.com.

It will be remembered that CIU.PR.C is a FixedReset that commenced trading 2010-12-2 after being announced 2010-11-16. It resets at +136 and will commence paying 2.24% on 2016-6-1.

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 3 (the “Series 3 Preferred Shares”) (TSX: MFC.PR.F) on June 19, 2016. As a result, subject to certain conditions described in the prospectus supplement dated March 7, 2011 relating to the issuance of the Series 3 Preferred Shares (the “Prospectus”), the holders of the Series 3 Preferred Shares have the right, at their option, to convert all or part of their Series 3 Preferred Shares on a one-for-one basis into Non-cumulative Floating Rate Class 1 Shares Series 4 of Manulife (the “Series 4 Preferred Shares”) on June 20, 2016. This date is the first business day following the conversion date of June 19, 2016, identified in the Prospectus, which falls on a Sunday. A formal notice of the right to convert Series 3 Preferred Shares into Series 4 Preferred Shares will be sent to the registered holders of the Series 3 Preferred Shares in accordance with the share conditions of the Series 3 Preferred Shares. Holders of Series 3 Preferred Shares are not required to elect to convert all or any part of their Series 3 Preferred Shares into Series 4 Preferred Shares. Holders who do not exercise their right to convert their Series 3 Preferred Shares into Series 4 Preferred Shares on such date will retain their Series 3 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 6, 2016, Manulife determines that there would be less than 1,000,000 Series 3 Preferred Shares outstanding on June 20, 2016, then all remaining Series 3 Preferred Shares will automatically be converted into an equal number of Series 4 Preferred Shares on June 20, 2016, and (ii) alternatively, if, after June 6, 2016, Manulife determines that there would be less than 1,000,000 Series 4 Preferred Shares outstanding on June 20, 2016, then no Series 3 Preferred Shares will be converted into Series 4 Preferred Shares. In either case, Manulife will give written notice to that effect to any registered holders of Series 3 Preferred Shares affected by the preceding minimums on or before June 13, 2016.

The dividend rate applicable to the Series 3 Preferred Shares for the 5-year period commencing on June 20, 2016, and ending on June 19, 2021, and the dividend rate applicable to the Series 4 Preferred Shares for the 3-month period commencing on June 20, 2016, and ending on September 19, 2016, will be determined and announced by way of a news release on May 24, 2016. Manulife will also give written notice of these dividend rates to the registered holders of Series 3 Preferred Shares.

Beneficial owners of Series 3 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. (EDT) on June 6, 2016. Conversion inquiries should be directed to Manulife’s Registrar and Transfer Agent, CST Trust Company, at 1-800-387-0825.

Subject to certain conditions described in the Prospectus, Manulife may redeem the Series 3 Preferred Shares, in whole or in part, on June 19, 2021 and on June 19 every five years thereafter and may redeem the Series 4 Preferred Shares, in whole or in part, after June 20, 2016.

The Toronto Stock Exchange (“TSX”) has conditionally approved the listing of the Series 4 Preferred Shares effective upon conversion. Listing of the Series 4 Preferred Shares is subject to Manulife fulfilling all the listing requirements of the TSX and, upon approval, the Series 4 Preferred Shares will be listed on the TSX under the trading symbol “MFC.PR.P”.

This is not a surprise given the low Issue Reset Spread of 141bp. I will report the reset rate when this is announced May 24.