PrefBlog

Element Financial Corporation has announced:

that the previously announced separation transaction (the “Separation Transaction”), to be implemented by way of plan of arrangement (the “Arrangement”) has received the requisite shareholder approval at Element’s special meeting of shareholders held on September 20, 2016 (the “Meeting”). As a result of the Separation Transaction, shareholders will hold one new common share of Element Fleet Management Corp. and one common share of ECN Capital Corp. (“ECN Capital”) for each common share of Element held. The results of the ballot were 313,993,690 common shares (99.52%) voted at the meeting in favour of the resolution.

According to the Management Information Circular:

On February 16, 2016, we announced that our Board of Directors unanimously approved in principle the reorganization of Element into two separate publicly-traded companies (the “Spin-Out Transaction”) that Element believes will be better able to pursue independent strategies and opportunities for growth and ultimately enhance long-term value for shareholders. If implemented, the reorganization would result in Element (which will be renamed “Element Fleet Management Corp.”) continuing as a fleet management company focused on generating revenue and earnings based on the continued service to Element’s existing fleet management business. The reorganization would also result in the creation of a new commercial finance company (to be named “ECN Capital Corp.”) with a broad origination platform in the commercial and vendor, rail and aircraft sectors, which will transition into an asset management business.
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Each of Element’s outstanding series of preferred shares will remain outstanding obligations of Element Fleet following the Element Arrangement.

Element’s Debentures will also remain outstanding obligations of Element Fleet following the Element Arrangement, and the Board has determined to adjust the conversion prices of the Debentures after the Element Effective Date in a manner equitable in the circumstances so as to reflect the effect of the Element Arrangement. Such adjustment will be subject to the approval of the TSX.
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While Element expects that the credit rating of Element Fleet following the Element Arrangement will improve in relation to Element’s current credit rating, there can be no assurance that its credit rating will improve or be maintained. In any case, the credit ratings assigned to Element are not a recommendation to buy, hold or sell securities of Element. A rating is not a comment on the market price of a security nor is it an assessment of ownership given various investment objectives. There can be no assurance that the credit ratings assigned to Element will remain in effect for any given period of time and ratings may be upgraded, downgraded, placed under review, confirmed and discontinued by an applicable credit ratings agency at any time. Real or anticipated changes in credit ratings may affect the ma rket value of securities of Element Fleet. In addition, real or anticipated changes in credit ratings may affect Element Fleet’s ability to obtain short -term and long-term financing and the cost at which Element Fleet can access the capital markets.

DBRS has had the company on Review-Positive since the announcement of intention in February, as previously reported. There has not yet been any announcement from the Credit Rating Agencies regarding changes in rating now that shareholder approval of the split has been obtained.

Affected issues are EFN.PR.A, EFN.PR.C, EFN.PR.E and EFN.PR.G.

Intact Financial Corporation has announced:

that 1,594,996 of its 10,000,000 Non-cumulative Rate Reset Class A Shares Series 3 (the “Series 3 Preferred Shares”) were tendered, for conversion on September 30, 2016, on a one-for-one basis, into Non-cumulative Floating Rate Class A Shares Series 4 of IFC (the “Series 4 Preferred Shares”) after having taken into account all elections received before the September 15, 2016, 5:00 p.m. (ET) conversion deadline. As a result of the conversion, on September 30, 2016, IFC will have 8,405,004 Series 3 Preferred Shares and 1,594,996 Series 4 Preferred Shares issued and outstanding. The Series 3 Preferred Shares will continue to be listed on the Toronto Stock Exchange (“TSX”) under the symbol IFC.PR.C. The Series 4 Preferred Shares will begin trading on the TSX on September 30, 2016 under the symbol IFC.PR.D, subject to IFC fulfilling all the listing requirements of the TSX.

Subject to certain conditions described in IFC’s prospectus supplement dated August 11, 2011, IFC may redeem the Series 3 Preferred Shares, in whole or in part, on September 30, 2021 and on September 30 every five years thereafter and may redeem the Series 4 Preferred Shares, in whole or in part, after September 30, 2016.

For more information on the terms of, and risks associated with an investment in, the Series 3 Preferred Shares and the Series 4 Preferred Shares, see IFC’s prospectus supplement dated August 11, 2011 which is available on www.sedar.com.

I previously reported that IFC.PR.C will reset at 3.332%, to be reset again in five years at GOC-5 + 266bp if not called. IFC.PR.D will pay 3-month bills +266bp, reset quarterly. There will be another conversion opportunity at the next Reset Date.

Canaccord Genuity Group Inc. has announced:

that after having taken into account all election notices received by the September 15, 2016 conversion deadline in respect of the Cumulative 5-Year Rate Reset First Preferred Shares, Series A (the “Series A Preferred Shares”) tendered for conversion into Cumulative Floating Rate First Preferred Shares, Series B (the “Series B Preferred Shares”), the holders of the Series A Preferred Shares are not entitled to convert their shares. There were 761,594 Series A Preferred Shares tendered for conversion, which is less than the 1,000,000 shares required for the ability to proceed with the conversion into Series B Preferred Shares, in accordance with the terms of the Series A Preferred Shares.

There are currently 4,540,000 Series A Preferred Shares listed on the Toronto Stock Exchange under the symbol CF.PR.A.

I previously reported that CF.PR.A will reset at 3.885% for the next five years before resetting again at GOC-5 + 321bp. The FloatingReset shares, which will not be issued at the present time, would have paid three-month bills +321bp, reset quarterly. The notice of extension was also reported.

Sun Life Financial Inc. has announced:

that 1,080,072 of its 8,000,000 Class A Non-Cumulative Rate Reset Preferred Shares Series 10R (the “Series 10R Shares”) have been elected for conversion on September 30, 2016, on a one-for-one basis, into Class A Non-Cumulative Floating Rate Preferred Shares Series 11QR (the “Series 11QR Shares”). Consequently, on September 30, 2016, Sun Life Financial will have 6,919,928 Series 10R Shares and 1,080,072 Series 11QR Shares issued and outstanding. The Series 10R Shares and Series 11QR Shares will be listed on the Toronto Stock Exchange under the symbols SLF.PR.H and SL.PR.K, respectively.

Subject to regulatory approval, Sun Life Financial: (i) may redeem the Series 10R Shares and the Series 11QR Shares in whole or in part on September 30, 2021 and on the 30th of September every five years thereafter by the payment of an amount for each share so redeemed of $25.00, together with all declared and unpaid dividends to the date fixed for such redemption, and (ii) may redeem the Series 11QR Shares in whole or in part on any other date after September 30, 2016 by the payment of an amount for each share so redeemed of $25.50, together with all declared and unpaid dividends to the date fixed for such redemption.

I previously reported that SLF.PR.H will reset at 2.842% for five years, while SLF.PR.K will pay 3-month bills + 217bp, reset quarterly; the notice of extension was also reported.

The Bank of Nova Scotia has announced:

that it has completed the domestic public offering of Non-cumulative 5-Year Rate Reset Preferred Shares Series 38 (Non-Viability Contingent Capital (NVCC)) (the “Preferred Shares Series 38”).

Scotiabank sold 20 million Preferred Shares Series 38 at a price of $25.00 per share and holders will be entitled to receive a non-cumulative quarterly fixed dividend for the initial period ending January 26, 2022, yielding 4.85% per annum, as and when declared by the Board of Directors of Scotiabank. The gross proceeds of the offering were $500 million.

The offering was made through a syndicate of underwriters led by Scotia Capital Inc. The Preferred Shares Series 38 commenced trading on the Toronto Stock Exchange today under the symbol BNS.PR.H.

On January 27, 2022 and on January 27 every five years thereafter, Scotiabank may, at its option, with the prior approval of the Superintendent of Financial Institutions (Canada), redeem all or any number of the then outstanding Preferred Shares Series 38 at a redemption price which is equal to par. Thereafter, the dividend rate will reset every five years at a rate equal to 4.19% over the 5-year Government of Canada bond yield. Holders of Preferred Shares Series 38 will, subject to certain conditions, have the right to convert all or any part of their shares to Non-cumulative Floating Rate Preferred Shares Series 39 (Non-Viability Contingent Capital (NVCC)) (the “Preferred Shares Series 39”) of Scotiabank on January 27, 2022 and on January 27 every five years thereafter.

Holders of the Preferred Shares Series 39 will be entitled to receive a non-cumulative quarterly floating dividend at a rate equal to the 3-month Government of Canada Treasury Bill yield plus 4.19%, as and when declared by the Board of Directors of Scotiabank. Holders of Preferred Shares Series 39 will, subject to certain conditions, have the right to convert all or any part of their shares to Preferred Shares Series 38 on January 27, 2027 and on January 27 every five years thereafter.

BNS.PR.H is a FixedReset, 4.85%+419, NVCC, announced 2016-9-7. It will be tracked by HIMIPref™ and has been assigned to the FixedReset subindex.

The issue traded 2,738,643 shares in a range of 25.41-49 before closing at 25.46-47. This represents the tenth largest daily volume in my database, just behind TD.PF.H, which settled last week, despite having only half the number of shares outstanding. Vital statistics are: